Ending fuel importation in 2018

The Minister of Industry, Trade and Investment, Mr. Olusegun
Aganga, has promised an end to fuel importation into Nigeria
by 2018. He spoke during a recent visit to steel fabrication
and power solutions company, Mikano International Limited, in
Lagos. Stopping the importation of oil, he said, will save
Nigeria a minimum of $10 billion.
Reducing the nation’s huge imports bill is, indeed, a desirable
objective. This is more so as the minister confirmed that
Nigeria also spent about $3 billion importing steel and $6 bil­
lion on cars and spare parts imports.
Agaga said the era in which the country relied entirely on the
export of raw materials was over and that with the launch of
the government’s “Industrial Revolution Plan” which began in
2012, Nigeria can no longer be import-dependent, “especially
in products we can produce ourselves.”
In apparent reference to the crash of crude oil price in the
world market, he noted that “we have identified 13 products
that will replace oil. These are areas where Nigeria has
comparative advantage and export capacity. Mexico did it
(diversified its economy and revenue base) in seven years.”
We would, indeed, have loved to share the minister’s optimism
on the 2018 target for ending fuel importation. Of all the areas
in the nation’s economy in which Nigerians feel let down by
successive governments, none hurts as much as the fact that
the country still imports a lot of its fuel in spite of being the
8th largest producer of oil in the world. Fifty-seven years after
the country commenced oil exports, the country cannot refine
enough oil to meet local demand.
This is in spite of having built four oil refineries. These
refineries were built with heartbreaking indifference to the
need for their maintenance and technology transfer. In other
countries, a contract to build a petroleum refining facility
would automatically come with a technical agreement to
enable the citizens eventually run, repair, and maintain the
facility on their own. It would also include building up skills
which would enable the country build new refineries on its
own if it so needs.
Instead of this, billions of naira are spent on the “turn-around
maintenance” of the refineries, in spite of which the refineries
run at about 25 per cent of their capacities. At the time the
second Port Harcourt Refinery was conceived, it was to refine
products for export, since the other three refineries were
considered adequate for Nigeria’s domestic needs. And, as
domestic needs increased with greater population and much
more robust industrial activity, the country’s planners ought to
have factored the increase into national planning.
Previous efforts to build more refineries have failed, including
the one involving the issuance of one dozen or so licences to
different companies, authorising them to build independent
refineries. The situation seems to have become so desperate
that the country, at a point, began negotiations with Niger
Republic to supply refined products to Nigeria.
At the moment, the Dangote Group which is planning a refin­
ery has promised Nigerians that in 2016, the percentage of pe­
troleum products that would be imported would be reduced
and might disappear altogether in 2018.
If this is the basis for the minister’s optimism, let everything
be done to make the plan a reality. The percentage of
Nigeria’s oil requirement that is imported is small, but the $
10 billion saving we can make from stopping the importation
could change the lives of millions of Nigerians if deployed
elsewhere in the economy.
The benefits of ending the importation of fuel are so obvious,
they do not need repeating. But, the people need to know the
basis for the optimism and the plan to achieve it to help keep
the government on track. Nigerians truly wish that we do not
have to import refined petroleum products.
The government should set benchmarks for the plan to stop
oil imports and institute measurable project evaluation tech­
niques, if only to restore the faith of Nigerians in its ability to
make the initiative a reality.