Don't Miss

Frank Kokori Interview : If refineries work, we won’t talk about subsidy

By on October 22, 2011

As the controversy generated by the Federal Government’s plan to remove fuel subsidy rages, former president of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Chief Frank Kokori, says those in authority are not sincere.

Speaking in a telephone interview, he said that there’s an element of fraud in the subsidy issue. According to him, nobody would be talking about subsidy if the country’s four refineries work at full capacity.

There’s a contention as whether there’s subsidy on fuel or not. What’s your position?
There is something called fuel subsidy, in real terms. Let me explain. For almost 10 years, between 1988 and about 1994, when I was President of PENGASSAN, the price of petroleum was at various times increased. At every step, we resisted the move and stopped it at a rate, because it was unreasonable and you will agree with me that nothing adverse happened at that time. We were determined to thwart these moves and the central authority could not implement it; but with the recent misgovernance, where everything is imported, toothpicks and all, fuel is also imported; so government defrayed some of the production cost, to ensure that the consumer gets the commodity at a so-called cheap rate. It is the importation of finished or, if you like, processed products that is causing the whole subsidy problem; importation of the finished product is paid for by the NNPC. So, that is what is causing the whole problem.

This subsidy thing has become what I call a regular hollow ritual of government. The importers of the finished products, also called independent marketers, repackage them from abroad and add unnecessary commissions here and there and when they bring it into Nigeria as finished product at more than twice the original cost, they say this is the price we must pay. Officials will now pay what we call subsidy into private pockets and accounts; so it is the normal hollow ritual. And they would tell you they would build roads, hospitals and provide electricity, with the subsidy; but at the end, they will not do anything. It has been like that. There is one thing every body forgets easily. During the period this thing has lasted, the various administrations promised to lift up the lives of Nigerians with money from the subsidy. For instance, they would promise to make university education free, build hospitals, do everything free. At the end of the day, if you go to the hospital, they will give you bill, and you will buy your drugs. Nothing is free after all. This happens throughout the country and has been sustained over the years.

Why can’t government fix refineries to avoid this?
When the refineries were newly built, they worked well and in stable condition, even though none worked at full capacity. I know, in those days, we used to do ‘turn around’ maintenance; that was general and comprehensive overhauling of the refineries until the late 80s; but as we speak, the turn around system has become a honey pot for the people because it’s done with dollars; that is hard currency; so it has become a big cash cow for the managers in power and nobody challenges them. There is no major opposition in the country today; so corruption has taken a centre stage and has permeated every fabric of the society.

The judiciary is no longer at ease; even the media have literarily gone to sleep, because they have been infiltrated. In other words, publishers publish only what they want. It is different from what we experienced, for instance during the June 12 saga, when the media houses were really patriotic. They were gorilla writers then, who used their pen to fight injustice with so much commitment. Some journalists were jailed because of their commitment to that cause. Now, publishers have been bought over. They publish only what they desire and so many things that are supposed to be made public don’t come out.

The entire system is bad that turn around maintenance has become chop chop kind of thing. You see why the refineries are not working? Those in-charge need over $200 million to carry out a turn around maintenance for each of the refineries and yet they can’t give to Nigerians between 25 and 30 per cent of daily fuel consumption. They can say maybe they are doing 80 to 90 per cent turn around, but the capacity production drags between 25 and 35 per cent of the installed capacity. That’s about the highest level. So, to me, I don’t really know what is happening in the country. Perhaps, that’s the cross we have to bear as nobody is willing to bell the cat.

How do you expect Nigerians to react to fuel subsidy removal? 
The masses cannot do anything by way of opposition, unless somebody is there to mobilise them. In fact, if the Nigeria Labour Congress would take this as a big issue, then they would mobilise the masses. You saw what happened during June 12 protests? The success of June 12 was because the masses were mobilised; journalists were fighting with their writing; others came with human rights campaign and the organised private sector also came out to support, before the authorities overran Lagos with police tanks and everybody ran away. It is the trade unions and the NLC, in the absence of a credible opposition, that can check the irresponsibility, fraud and excesses of the ruling government in Nigeria. But even at that, the NLC, the organised private sector and the rest have been infiltrated and their ranks broken. So, we have a real big problem.

I only believe that my colleagues will see this as a challenge. The real challenge is with the NLC to rise to the situation. I’m sad with the government. People stick to power and refuse to quit. This arrogance of governance is not desirable. There is so much arrogance in governance that accountability has been thrown into the dustbin. Now, we are talking about N144 as real cost, as they claim they are subsidising with N125, so from N65 to N144 per litre. What is the difference in that? What that means is that the masses would face serious hardship, unless the subsidy is used to provide, in concrete terms, those basic amenities that would positively impact on people’s lives and environment.

If all refineries are working and meeting the domestic demand, do you think there will be need for subsidy?
Why should there be subsidy when we refine our crude locally? When are talking about subsidy because the refineries are not working and because we sell our crude oil to foreign buyers as export; we also prepare to buy back the processed products. It’s due to the export business that government justifies the money spent to get back the refined product as import. If we pick crude oil from the Niger Delta region and refine it in Port Harcourt or Kaduna or Warri, then you will not talk of subsidy. Subsidy has become a hollow ritual and top officials do it all the time to enrich themselves.