FG should repair, sell refineries to the private sector to run them – Olu Falae

Renowned economist and former Minister of Finance, Budget, and National Planning, Olu Falae, has advised that the Nigerian government should repair its refineries and sell them to the private sector which will be able to run them effectively.

He added that the government has shown to be unable to run efficiently the refineries.

Falae made this statement while speaking in an interview on Channels TV on Thursday.

He said, “My belief is that Nigeria’s problem with fuel and its price will be substantially resolved when we can repair and recommission our refineries and sell to companies that know how to run refineries.

“We should not try to run them ourselves because if we try to do so, politics will intervene and we will mismanage them. I am sorry to say this.”

In addition, Falae, who is the Oluabo of Ilu-Abo in Ondo State, insists that selling the refineries, a contentious issue in Nigeria is the key solution.

“So, we repair them and sell them to those who can manage refineries. And then, they will use those refineries to refine Nigerian crude oil and sell them to those us here in Nigeria. That reduces the influence of the dollar exchange rate substantially.

“I am almost certain that the day we do that, the price of fuel will come down almost substantially. I do not doubt that,” he added.

Backstory

For many years, the most populous country in Africa and one of the continent’s major oil producers has relied on fuel imports to satisfy local demand due to the underperformance of government-owned refineries situated in Warri, Port Harcourt, and Kaduna.

Nigeria engaged in a multi-billion dollar exchange of crude for gasoline, which was subsequently subsidized for its domestic market.

In addition, the substantial drain on foreign exchange occurred amid declining oil revenue due to the combined impact of the coronavirus pandemic and the Russia-Ukraine war.

However, President Bola Tinubu, upon his inauguration, announced the termination of the subsidy regime, causing a threefold increase in the commodity’s price.

Speaking on the development, Falae said he believes Nigerians should not be buying crude oil at the international market price.

“My position is that crude oil is a natural endowment of Nigeria. God himself has given it to us to help us to stimulate development.

“So, we should consume it at the cost of production plus a reasonable profit margin for the producers; not at the international market price,” the monarch argued.