he persistent question of what to do with Nigeria’s four underperforming government-owned refineries has surfaced yet again. This time, the potential sale of the facilities operated by the Nigerian National Petroleum Company Limited (NNPCL) became a topic of discussion in faraway Abu Dhabi, UAE, during the recent International Petroleum Exhibition.
Olu Verheijen, President Bola Tinubu’s Adviser on Energy, revealed the Federal Government’s intention in an interview with Bloomberg. She disclosed that the government is actively seeking a technically and financially capable partner to either collaborate with or to acquire the refineries outright.
Nigeria currently possesses four refineries—two in Port Harcourt and one each in Warri and Kaduna—with a combined installed capacity of 445,000 barrels per day. Tragically, these facilities have been largely comatose for years. Repeated attempts to revive them through costly Turnaround Maintenance (TAM) and outright reconstruction have consistently failed.
The most recent of these highly publicized efforts took place under the former Group Managing Director of the NNPCL, Mele Kyari. In November of last year, Nigerians were briefly excited by news that the Port Harcourt Refinery had reportedly resumed petrol production, only for operations to mysteriously grind to a halt shortly thereafter.
The financial hemorrhaging has been catastrophic. It is estimated that the nation has sunk well over $25 billion into futile revival attempts since the 1990s. The House of Representatives is now probing how $18 billion appropriated just between 2010 and 2024 for refinery revival was spent with nothing to show for it.
In addition to the failed capital expenditure, the nation continues to bleed money on idle staff. Reports show that NNPCL paid ₦69 billion in staff salaries in 2020 alone. Between 2021 and 2024, the personnel costs for the inactive refineries collectively gulped an astonishing ₦272 billion.
The NNPCL and its refineries have, for too long, been treated as cash cows by successive segments of the ruling elite. Every serious effort to scrap or sell these assets has been actively sabotaged, often by powerful labour unions within the industry. It is widely known that Aliko Dangote, the owner of the massive Dangote Refinery, was frustrated out of his own effort to acquire the government refineries—an experience that motivated him to pursue his dream of building his own $20 billion, 650,000 barrels per day plant.
We strongly urge the Federal Government to proceed with the sale of these refineries, provided they can find willing and capable buyers. The core problem of managing these assets is clearly beyond the government’s capacity. The huge funds currently being used to keep these financial white elephants alive would be much better invested to boost other critical sectors of the economy or diverted to essential social services.
Crucially, the weapon of blackmail previously used by unions to prevent the government from making the right decisions is no longer effective. With the Dangote Refinery now operational, alongside other conventional and modular refineries beginning to flower across the country, Nigeria is rapidly regaining its domestic refining capability. Furthermore, the downstream oil industry’s deregulation allows for necessary product importation.
With Dangote’s ambitious plan to increase his output to 1.4 million barrels per day next year, it makes absolutely no economic sense to continue throwing money down this endless drain. The Federal Government and the NNPCL have proven themselves incapable of efficiently operating refineries, regardless of the latter’s change in nomenclature.
The government must now concentrate entirely on its proper role: regulation and governance of the oil sector, leaving the business of refining to the experts in the private sector.
