Former Vice President Atiku Abubakar has faulted the $1.5 billion vote by the federal government to rehabilitate the Port Harcourt Refinery, describing the cost as prohibitive and suspicious.
According to him, given the fact that the Royal Dutch Shell Plc sold the Martinez Refinery, a more profitable refinery in the United States, for $1.2 billion in 2020, the $1.5 billion to rehabilitate the Port Harcourt refinery is worrisome.
He also expressed concern about Nigeria’s debt stock that has risen from N12 trillion at the inception of the Buhari administration in 2015 to N32.9 trillion.
The Federal Executive Council (FEC) had on Wednesday approved $1.5 billion for the rehabilitation of the Port Harcourt refinery.
The FEC approved the amount at its virtual meeting presided over by President Muhammadu Buhari.
But Atiku in a statement Thursday, said the approval was suspicious.
“That Nigeria’s economy is in dire straits is a fact well known both to the nation and to our international partners. Unemployment has just reached an all-time high of 33 per cent, while inflation has hit another record high of 17 per cent,” he said.
He stated that at this critical period, Nigeria must be prudent with the use of its revenue.
He added that if Nigeria must borrow, it must do so with the utmost responsibility and discipline.
Atiku described the approval of $1.5billion for the refinery rehabilitation as “an unwise use of scarce funds at this critical juncture for an assortment of reasons.”
“First of all, our refineries have been loss-making for multiple years, and indeed, it is questionable wisdom to throw good money after bad. At other times, I have counselled that the best course of action would be to privatise our refineries to be run more effectively and efficiently,” he added.
According to him, the rehabilitation cost appears prohibitive, especially as Shell Petroleum last year sold its Martinez Refinery in California, which is of a similar size as the Port Harcourt refinery, for $1.2 billion.
“We must bear in mind that the Shell Martinez Refinery is more profitable than the Port Harcourt Refinery,” he added.
Equilon Enterprises, on behalf of Shell Oil Products of the United States, had in February 2020 concluded the $1.2 billion divestment of the Martinez Refinery in California to PBF Energy subsidiary PBF Holding.
According to agency reports, Martinez is a high-conversion refinery that produces petrol, diesel and jet fuel.
Crude supply and product offtake agreements were also part of the deal signed by Shell and PBF, to ensure that the former’s customers will continue to have access to quality Shell-branded fuels.
The refinery has a 157,000bpd refining capacity.
The deal comprised the sale of Shell’s on-site logistics assets, including a deepwater marine facility, product distribution terminals, and refinery crude and product storage facilities.
On the cost of Shell’s refinery and the amount budgeted for Port Harcourt Refinery, Atiku said: “Given this discrepancy, might we ask if there was a public tender before this cost was announced? Was due diligence performed – because we are certainly not getting value for money? Not by a long stretch.
“We cannot as a nation expects to make economic progress if we continue to fund inefficiency and we are going too deep into the debt trap for unnecessarily overpriced projects.
“Our national debt has grown from N12 trillion in 2015 to N32.9 trillion today. Indeed that is shocking enough to cause us to be more prudent in the way we commit future generations into the bondage of bonds and debt.”
Chuks Okocha in Abuja