Despite substantial investments totaling N200 billion since 2021, Nigeria’s efforts to rehabilitate and repair its aging refineries have yielded little success, leaving the facilities largely non-functional.
In 2021, the Nigerian National Petroleum Company Limited (NNPCL) reported that it was spending N8.3 billion monthly on the rehabilitation of its four refineries: the Port Harcourt refineries, Kaduna Refining and Petrochemical Company, and Warri Refining and Petrochemical Company. These facilities, with a combined production capacity of 445,000 barrels per day, were expected to play a crucial role in meeting Nigeria’s energy needs.
During a presentation to the Federation Accounts Allocation Committee (FAAC), NNPCL disclosed the significant financial commitment to these refineries. The 2022 financial statements of the NNPC Group further revealed that N114.2 billion was spent on repairs and maintenance, a category that typically includes refinery rehabilitation, with pipeline maintenance accounted for separately under the cost of sales.
Documents obtained by Trojan.com.ng indicate that between January and July 2022 alone, the NNPCL expended N54 billion on refinery rehabilitation, as reflected in the August 2022 FAAC report. By the end of 2022, NNPCL had spent a total of N214 billion on the rehabilitation, repair, and maintenance of refineries over the two-year period.
However, despite these considerable expenditures, none of the refineries have been successfully revived. In June 2022, NNPCL’s Chief Executive Officer, Mele Kyari, publicly acknowledged that the refineries had ceased to function.
The Port Harcourt refinery, in particular, has been a focal point of government promises. Although the NNPCL repeatedly assured Nigerians that the refinery would soon be operational, these promises have yet to materialize. Once fully functional, the Port Harcourt refinery is expected to have a production capacity of 210,000 barrels per day.
In the absence of operational refineries, Nigeria has become increasingly dependent on imported petroleum products, driving up the landing cost of fuel and contributing to rising inflation. The situation has been further exacerbated by the removal of fuel subsidies under President Bola Tinubu’s administration, which has led to even higher fuel prices and increased economic strain.
Many Nigerians are now questioning the NNPCL’s ability to restore the refineries to full functionality, given the significant investments made and the lack of progress to date. The continued reliance on imports, coupled with the ongoing inflationary pressures, underscores the critical need for a functional domestic refining sector, yet skepticism remains about whether this goal can be achieved.
