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Why Refineries Are Not Yet Privatised, By Obasanjo
•Gives condition for stable power supply By Tokunbo Adedoja and Ndubuisi Ugah, 11.29.2004
President Olusegun Obasanjo has said it has not been possible for his administration to privatise the nation's four refineries because prices of fuel are still being regulated and the refineries are still over-staffed. Speaking last night during this month edition of Presidential Media Chat aired on the Nigerian Television Authority (NTA), Obasanjo said for sometime, his administration has been making efforts to privatise the nation's refineries without success because of these militating factors. "For sometime, we have been trying to make efforts to privatise. Privatise to those we know will run it efficiently and effectively. Only about three or four weeks ago, I was talking to Total, they came to see me. I said, you people were interested in refineries before, why did you chicken out? They said it is not chickening out, they found that the refineries, where there should be 250 people working in our refinery, we have 1,500 and if they take over such a refinery they will spend five years working and having problem with labour on who should go and who should not go. What do we do in a situation like that? So I called NNPC and say, what nonsense is that? Reduce labour so that people who can help to manage and come in and put their own resources into it can come in", he said Speaking further, Obasanjo said "for as long as you are regulating, nobody will want to put his money where he does not know what he will get". On the efforts to ensure that new private refineries are built, he said there were eighteen applicants which were granted temporary licences in that respect, but that only six showed interest in converting their licences to production licences due to the fact that prices of fuel are fixed. "We had eighteen applications, which were given, if you like call it, temporary licence for refineries. Because the refineries which we have now, even if they are working to full capacity, their installed capacity, we will still have to import 40 per cent of the product we need. And government has said, no, we are not going into refineries anymore, the refineries we have, we want to privatise. "Only six of the eighteen that were bidding for provisional licence have shown any interest in really turning provisional licence to production licence. They are reluctant because you say the price is fixed. If I am producing chicken and you say you will fix the price of my production of chicken, you also have to fix the price of feeds, the price of day old chicks, the price of labour, the price of electricity. You have to fix all that. All the simple things going in there. So we will not be able, still, to get to fuel sufficiency in refining capacity until we deregulate and we allow people who want to establish refineries to come and establish", he explained. The President also scored his administration high on the issue of availability of fuel noting that the fuel situation in the country has improved greatly. Buttressing his position that fuel supply situation has improved in the country, Obasanjo said "yesterday(Saturday) I was in Akure, I was in the car with the governor of Ondo state. And I said, how is fuel here, and he said oh, we are going along. Look at the Petrol station, they are there. I said, how is the agitation here. He said there is no agitationhereand said when I was campaigning last year, I mention it because he said this is a true story. He said when he was campaigning last year, the only way he could get petrol at N80 in Akure was that he gave N2 million to a petrol station and he showed me the petrol station. It is an AP petrol station for the man to be bringing petrol to Akure, that otherwise, would have been paying N100 per litre. That was last year". Commenting on the erratic power supply in the country, he said "until we have a situation where our consumption is only about 75 per cent of our production or what we are capable of producing, we will not get out of what you are saying". Noting that in South Africa they can produce about 45,000 megawatts, while their consumption is about 33, 000 megawatts, he said, there must always be a sort of "cushioning for emergency situations". The president said further that a unit at the Egbin station was put out of production due to the need to service it, but that while that was going on, a unit at Shiroro station which was producing at 100 per cent, got spoilt consequently worsening the erratic supply of power. He added that the first Independent Power Project (IPP) by AGIP would be put on stream early next year to provide additional 325 megawatts. Speaking further, President Obasanjo also said there was cause for Nigerians to be hopeful as government has introduced measures, which will help cushion the effect of the economy on the living standard of the masses. He said as part of government's effort to improve the living standard of the people, a minimum of N15 billion has been set aside for Bank of Industry (BON) in next year's budget, while a substantial part of it will go to Small and Medium Scale Enterprises (SMEC). He also added that N17.5 billion would go to the Agricultural Bank for micro-credits while N15 billion will go to Mortgage Bank. Maintaining that things are getting better in the country, Obasanjo said "when we came into office, the minimum wage then was N3,000 but that today, it is N8,000." He added that "the situation has so improved as to have university teachers, who were not able to buy cars, even Tokunbo before now own their own." “When you go into investigation, you will discover that those, who say things are hard are those who made easy money and are no longer making such monies again”, he said. He said his message for Nigerians, especially those who live below the average poverty level is that "poverty is a relative issue" and as such should have hope of a better tomorrow. "The really poor man is the family man who does not know what his family will eat tomorrow. I do not say that everybody is rich as there are still places where such exist except that they are really very few. If such people exist in the rural areas (villages), agriculture is the answer. If it is in the urban or semi-urban areas, we are putting a lot of monies in the Small Scale Industries. I will say to the really poor, get up and try to do something, there is hope", he stressed. On the escalating nature of Acquired Immune Deficiency Syndrome (AIDS) in the country, Obasanjo said the last survey conducted showed that "we had been brought back from 5.8 per cent to five per cent", a development, he said aside from been an added advantage to government's efforts in combating the dreaded diseases, was still very high. He remarked that though some states still have high AIDS cases, government has continued to ensure that these states "are given extra attention, that is, extra-manpower attention to see that the dreaded disease is completely under control mechanism". He noted that the persistent outbreak of violence in some of the nations in Africa, is due largely to lack of development and that most of the problems in these areas have to do with underdevelopment. He also said those who took up arms in these violence-ridden countries hinge their decision on hopelessness and the need for good governance.
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