I patiently listened to one Bala Zaka speak in his interview with Arise TV. He was described on the show as an “oil and gas expert”.
I am not an “oil and gas expert”, but I have studied, published, and spoken about Nigeria’s oil and gas industry over many years that I know certain things about the industry in Nigeria that will clarify certain misleading assertions that Mr. Zaka made during the 30-minute interview on Arise TV:
1. The summary of Mr. Zaka’s angst is the removal of fuel subsidy.
2. Fuel subsidy expenditure progressively grew from a few hundred billion naira a year during President Obasanjo’s era to trillions of naira during President Buhari’s administration (i.e. an increase of over 2,000% in less than 15 years!)
3. President Obasanjo issued over 20 licenses for the construction of private refineries, but none of the licensee built a single refinery. Why? You cannot attract private refineries in a heavily subsidized oil sector!
4. Dangote and his business associates, under the “Bluestar” group, paid about $1 billion to the FG to buy the Port Harcourt Refinery, expand it, and reactivate production (including production of fertilizers).
5. Soon after the exit of President Obasanjo in May, 2007, the Nigeria Labour Congress (NLC) put pressure on President Yar’Adua to reverse the sale of Nigeria’s “commonwealth”; old NNPC too towed the same path, boasting that “in September, we shall turn the refineries around”. Yar’Adua capitulated, Bluestar group got back their money, Port Harcourt Refinery has remained moribund 16 years after, while Dangote has just completed a $19 billion refinery, whose construction lasted for only 6 years (Construction started n 2017)! You may wish to read my reaction in 2007 (I was an under 40-year old “greenhorn” then; but when you read, you may generously concede that I was right then as I am now):
See another publication on the matter two years after the above (in 2009):
6. The battle to pass the Petroleum Industry Act (PIA) was waged for years against selfish interests, which were aligned against the Act, until October, 2021 when President Buhari signed it. This Act forbids FUEL SUBSIDY, only allowing it to subsist for ONLY 18 months after commencement of the Act (I wonder if Mr. Zaka is aware of this).
Between January, 2022 (when PIA kicked off) and May, 2023, the new NNPCL made no deposits into the Federation Account (It made N123 billion deposit on its June, 2023 operations). Why? The company was “paying fuel subsidy”, and yet being OWED by Nigeria. People who share Bala Zaka’s views should suggest how Nigeria was supposed to solve her revenue problem while keeping the Big Elephant (fuel subsidy) in the room. Secondly, would such people prefer President Tinubu to break a law of the land (PIA)?
7. I need to inform Bala Zaka and people who share his views that Dangote Refinery is not owned 100% by Dangote Industries. The Nigerian federation (federal, state, and local), through the NNPCL, owns 20% of Dangote Refinery! NNPCL has already paid Dangote cash of over $1.3 billion, shall supply crude oil for a fraction of the remainder shareholding, and pay with its dividends from the refinery production for the balance of its shareholding. No doubt, if Mr. Zaka was aware of this deal, he might not have spoken the way he spoke down on the Dangote Refinery.
8. Dangote Refinery has already quadrupled Nigeria’s gas production with its gas pipeline infrastructure linking the refinery (under the Atlantic Ocean) with Bonny Island. The refinery generates more electricity than Ibadan DISCO distributes! With regard to what Zaka said, that the refinery should have commenced production on the “day of commissioning”, I would only counsel him to listen to what Aliko Dangote said on the day of commissioning.
9. From one barrel of crude oil, about 159 liters of PMS are obtained. From the same barrel, other products such as diesel, aviation fuel, heating oil (kerosene), etc., are also extracted. Now, if only one (or two) of the products is desubsidized, while the rest remain subsidized, common sense supports the expectation of a rub-off impact on the desubsidized product(s).
10. I don’t know if Bala Zaka is aware that licensed modular refinery owners in Nigeria are refining and selling PMS (petrol) in Nigeria. Their complaint is that while supply of crude oil to their refineries is not reliable, they are also charged N5 per liter of petrol as “toll fee” (I have already requested an appropriate intervention by President Tinubu).
11. Probably, Bala Zaka is not aware of Nigeria’s growing local production and EXPORT of fertilizers (even beyond Africa)! Secondly, OPEC has just published a report that the number of Nigeria’s oil rigs has grown significantly. Besides, Nigeria’s crude oil production has been growing (as efforts to fight oil theft are yielding fruits), NNPCL has paid off its share in the Joint Venture partnership, which it owed for years, thus crimping new investments in oil prospection and mining.
12. Nigeria’s local food production and packaging are on the increase. A visit to retail chain outlets will convince anyone. By the way, contrary to Bala Zaka’s claims, the private sector grows the economy, while government facilitates enterprise.
13. The removal of fuel subsidy and floating of the naira have resulted in the accrual of about N2 trillion into the Federation Account from one month earnings alone (June, 2023)! It is beautiful watching Nigerian state governors harmoniously working together with President Tinubu and Vice President Shettima, across party lines, to build a great nation and improve the welfare of Nigerians. I am impressed that, contrary to what obtained in the past, they have agreed to share only N907 billion and save over N780 billion!
This is not the time to scout around for captains to lead us back to Egypt only because of the momentary inconvenience of the wilderness. We are on the right track, even though our path leads through a dangerous wilderness full of scorpions and venomous serpents. Let us discuss how better to cushion the temporary discomfort; let’s get some “manna” for our citizens while telling of the succulents fruits of the Promised Land.
Prof. Leonard Karshima Shilgba
©Shilgba
Leonard Karshima Shilgba, PhD
Professor of Mathematics,
Director of Academic Planning and Quality Assurance,
Pioneer Ag Vice Chancellor/President,
Pioneer Vice President (Academics)
Admiralty University of Nigeria.
Tel: +234-7035939505;
+234-9074346000 (WhatsApp)
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