Nigeria’s Refineries Face Privatization Debate as Experts Call for Reform
Industry experts and stakeholders are increasingly advocating for the privatization of Nigeria’s three state-owned refineries, arguing that these assets have become technically insolvent and chronically non-operational despite billions in rehabilitation investments.
The debate was reinvigorated by recent discussions from the Bayo Ojulari-led NNPC management regarding the potential privatization of the refineries. Years of corrosion, erosion, and environmental wear have severely compromised the process integrities of these facilities, while their lack of financial independence has created an unsustainable drain on national resources.
Nigeria has invested approximately $3 billion in the Port Harcourt, Kaduna, and Warri refineries in recent years, with minimal operational results. Since 2008, about $18 billion has been spent on refinery rehabilitation, personnel costs, and emoluments across the country, yet the plants remain largely dormant.
This contrasts sharply with Nigeria’s successful equity stake in the Nigeria Liquefied Natural Gas (NLNG) project, which has proven profitable and dividend-yielding under private-sector discipline.
Under the Petroleum Industry Act (PIA), NNPC Limited, together with the Ministry of Finance Incorporated (MOFI) and the Ministry of Petroleum, can empower the National Council on Privatisation and Commercialisation (NCPC) through the Bureau of Public Enterprises (BPE) to initiate transparent asset sales or liquidation.
The Manufacturers Association of Nigeria (MAN), petroleum marketers, and the broader Organised Private Sector (OPS) have joined calls for privatization, arguing that only a fully privatized downstream oil sector can break the cycle of inefficiency and import dependency.
NNPC Group CEO Bayo Ojulari has indicated that the sale of refineries remains “not off the table,” reflecting recognition that years of rehabilitation have yielded diminishing returns. The emergence of the Dangote Refinery, with its 650,000-barrel-per-day capacity, provides a successful private-sector model for comparison.
Industry experts argue that privatization could generate immediate revenue, reduce budgetary pressure, and release capital for new exploration activities, while moving the government away from direct business operations toward a regulatory role.
Source: leadership.ng