February 16, (THEWILL) –In a dramatic coincidence, Nigeria’s four moribund refineries, which have laid comatose for well over two decades, have returned to life. This is happening at a time Dangote Petroleum Refinery has begun production and inching close to full capacity operations.
Dangote Petroleum Refinery, the largest single train refining plant in the world, took the globe by surprise when it commenced actual production of petrol on September, 3, 2024 — shocking sceptics and snubbing mortified government officials who saw the new facility as a threat.
Although Dangote achieved the feat through thick and thin underlying several unsuccessful attempts to start production on September 3, 2024 remained indelible in the annals of Nigeria’s economic history: the much-desired petrol rolled out from a Nigerian refinery, other than the NNPC plants, after 28 years.
Strange coincidence
Since the Dangote ‘magic’, the four state-owned refineries (Warri, Kaduna and two in Port Harcourt), which are run by the Nigerian National Petroleum Company Limited (NNPCL), have “commenced production” and are now “producing”. The second Port Harcourt Refinery is said to be on the verge of commencing production “without prior announcement”.
This strange coincidence has put paid, at least for now, the unending repair of the refineries which has lasted for well over two decades, gulping tax payers’ money in mindless dimensions, to the tune of over N11 trillion – without results.
Era of unfulfilled promises
Before now, the promise of fixing the refineries was the cliché in government cycles, including law makers, seeking for an opportunity to shine. On the whole, the scenario exposed Nigeria as a country with heartless leadership where impunity runs unchecked.
Years of dead plants
Into the era of empty promises to fix the refineries, the Senate on October 24, 2023, constituted an ad-hoc committee to investigate all contracts estimated at over N11.35 trillion awarded for the rehabilitation of the four moribund refineries in the country.
This followed a motion brought by Senator Sunday Karimu on the unending repairs of the nation’s refineries despite the huge resources invested in fixing them.
While presenting his motion, Senator Sunday Karimi (Kogi West) averred that from 2010 till date, the Nigerian Government had spent N11.35 trillion on contracts to rehabilitate the four refineries, but they remained unproductive.
In graphic details, the lawmaker said, “Despite the moribund state of the four refineries, the operating costs of these refineries between 2010 and 2020 is estimated at N4.8 trillion naira. The refineries are estimated to make a cumulative loss of N1.64 trillion, within four years.”
He added, “We are concerned that the Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven (7) years from 2013-2019 at an estimated cost of N12,161,237,811.61.
“In addition, on 18th March, 2021, a rehabilitation contract was executed between NNPC/PHRC and Tenenimont SPA at a Lump Sum of $1,397,000,000.00, about N75 billion naira amidst global public criticism, no result has been achieved.
“Phase 1 of the Project is expected to be completed in 28 Months after the contract, Phase 2 within 24 months and Phase 3 within 44 months of execution. Despite this, the Port Harcourt Refinery remains a money pit.
“Going by projections and representations from NNPCL the renovation works ought to be completed and operations of the Refinery commenced by June 2023.”
Senator Karimu expressed further concern that in a bid to revitalise the Warri Refinery, the Federal Government injected huge public funds into revamping the facility to the tune of over N28, 219, 110, 067.10 between 2014 and 2019.
The Senate, consequently, constituted a 7-member ad-hoc committee to investigate the matter and to submit their findings to the upper legislative chamber within four weeks – November 21, 2023. No report was submitted.
Momentary detour
However, in a dramatic turn of events, the NNPCL on August 30, 2024 announced that it was seeking private Operations and Maintenance (O&M) companies to bid for the Warri and Kaduna refineries (while repairs of the Port Harcourt refinery were in progress).
“NNPC Ltd is seeking to engage reputable and credible Operations & Maintenance (O&M) companies to operate and maintain two of its refineries, Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC), to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligations,” the company said in a circular.
As expected, this was not achieved. Instead, the plants have suddenly begun production, according to NNPCL.
Another U-turn
Last week, NNPCL disclosed that the rehabilitation of Kaduna Refinery and Petrochemicals Company (KDPRC) is at more than 60 per cent mechanical completion.
NNPCL Executive Vice President (Downstream), Isiyaku Abdullahi broke the news in Abuja at the NNPC Workshop/Engagement session with Kannywood artistes.
He said the company had been working flat out to deliver the refinery this year and is simultaneously working on the pipelines with in-house capacity.
“Kaduna in sha Allah should come on stream this year. We are working tirelessly on the pipelines. We are working on Kaduna.
“God willing, it should come to the stream this year. We are working tirelessly on the pipelines.
“All the three refineries work directly under my superintendence. And as you are aware, God has been wonderful that with good leadership we have been able to revamp Port Harcourt and Warri Refineries.
“And by God’s grace, this year, we will deliver Port Harcourt Refinery.”
The NNPCL had on December 30, 2024, announced the restart of the 125,000 barrels per day (bpd) Warri Refinery and Petrochemical Company (WRPC), which was first approved for rehabilitation at the sum of $897 million in 2021.
“Additionally, we have made substantial progress on the new Port Harcourt Refinery, which will begin operations soon without prior announcements,” Olufemi Soneye, NNPCL’s spokesman said in a press release on 26th November 2024, while announcing the commencement of production by the Old Port Harcourt Refinery.
Dangote’s deft move
Amid this search in a mixed bag, Dangote has moved on, causing ripples in the behemoth called NNPC. Recently, the move by Dangote Petroleum Refinery to slash the price of diesel by N55 per litre sent ripples through Nigeria’s downstream petroleum sector. This left diesel importers in a precarious position and challenging Europe’s long-standing dominance in supplying petroleum products to Africa’s biggest oil producer.
The Head of Refinery, Edwin Devakumar, disclosed recently that the Dangote Petroleum Refinery, the largest in Africa, could begin operating at full capacity of 650,000 barrels per day in 30 days, as reported by Reuters last Monday.
According to him, the 650,000-barrel-per-day refinery built by Nigerian billionaire Aliko Dangote in Lagos began processing crude into products, including diesel, naphtha, and jet fuel, in January last year and started processing petrol in September.
“The refinery is currently operating at 85 percent capacity, and we can go 100 percent in 30 days,” Devakumar was quoted as saying.
Fuel marketers in Nigeria’s downstream petroleum sector are experiencing significant financial losses as their petrol prices become less competitive following a recent price cut by Dangote Refinery. The refinery has reduced its ex-depot price to N890 per litre, affecting sales at NNPC-affiliated and independent fuel stations that rely on imported fuel.
Something bizaare
In a report on Thursday, Nairametrics claimed that a confidential report exclusively obtained by it from a reliable source tracking the movements of motor tanker vessels, which monitors cargo tanks entering the country, revealed that NNPCL has imported 159,000 metric tons of Premium Motor Spirit (also known as petrol) between February 1, 2025, and February 12, 2025.
“Based on a standard conversion of 1,341 litre per metric ton, this translates to approximately 213 million litres of petrol, imported by the state-owned oil company, according to the Motor Tanker Vessels report.
“The revelation comes at a time Dangote Refinery is locked in a legal dispute with NNPCL and major oil marketers over the importation of refined petroleum products, which are already being produced locally without any shortfall,” the news outlet disclosed in a yet to be confirmed report.
Meanwhile, Abdullahi has urged Nigerians to prepare for the purchase of the Initial Public Offer (IPO) of NNPC very soon, saying setting aside funds for investment in oil and gas produces several derivatives.
“For all Nigerians, there is an opportunity. Very soon, we will go IPO. We will go public. Put certain amount of money aside so that you can come and get from oil and gas,” he said.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
