Early this year, the Petroleum Products Retail Outlets Owners Association of Nigeria urged the Federal Government to privatize its refineries to foster competition in the downstream. This is a sound advice, it resonates with modern business practices.
It was estimated that in over two decades, before the restart of the Warri and old refineries, the Federal Government has sunk over $20 billion into the rehabilitation of government owned refineries with no fruitful results, thus, it is crystal clear that with the refineries still firmly in the control of the government, the little progress made now could be rolled back soon. So the right thing to do now is to move them into private ownership.
Privatising them will allow them to stand in good stead to compete with the private owned Dangote Refinery and other emerging ones. Accountability will increase by a notch. Also, privatization will give them adequate access to capital locally and internationally.
All the 134 refineries in the United States are privately owned. This is a sound economic model to adopt. The Federal Government has so much to gain by privatizing the refineries. It will shield it from raising unavailable funds and could make the companies huge contributors to the national coffers through dividends. President Bola Tinubu , who has a private sector background, should privatize the public refineries immediately.
BY
OYETAYO OLADIMEJI
DIRECTOR, PROGRAMMES DEPARTMENT,
SUCCESS 105.3 FM, IBADAN.
