Nigeria's Refining Crisis: A Tale of Idle Refineries and Massive Fuel Imports
A Nation's Struggle for Energy Independence
In Nigeria, a country rich in oil resources, a controversial issue has emerged: the continued reliance on imported petrol despite having three government-owned refineries. These refineries, managed by the Nigerian National Petroleum Company Limited (NNPC), remain in a state of dormancy, leading to a massive influx of imported fuel.
The Numbers Don't Lie
According to official data, NNPC and other marketers imported a staggering 1.5 billion litres of petrol in November alone. Oil marketers attribute this high import volume to the Dangote refinery being the sole producer of petrol in Nigeria. They argue that the inactivity of NNPC refineries has only exacerbated the situation, further fueling the nation's dependence on imported refined products.
Dangote's Dominance
As the Dangote refinery stands as the only operational petrol-producing plant in Nigeria, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) granted licenses to NNPC and other traders to import up to 52 million litres of petrol daily in November. This import figure represents the highest since the Dangote refinery commenced production in September 2024.
A Controversial Move?
Here's where it gets controversial: the NMDPRA's decision to issue import licenses has been questioned by industry associations. The Independent Petroleum Marketers Association of Nigeria and the Petroleum Products Retail Outlet Owners Association of Nigeria argue that if the NNPC refineries were functional, there would be no need for such licenses.
The November Surge
The November import figure of 52.1 million litres per day is a stark reminder of Nigeria's high dependence on imported fuel. Despite the growing local refining capacity, the country's fuel supply remains heavily reliant on external sources. The NMDPRA explained that low supply in September and October 2025, below the national demand threshold, led to the surge in fuel importation.
Marketers Speak Out
Oil marketers point fingers at the dormant state of NNPC's Port Harcourt, Warri, and Kaduna refineries. They believe that the Dangote refinery, despite its efforts, could have benefited from the support of functional NNPC refineries. Chinedu Ukadike, National Publicity Secretary of IPMAN, regrets that Nigeria continues to import petrol despite efforts to boost local refining capacity.
The Law and Its Interpretation
Ukadike highlights the Petroleum Industry Act, which states that importation should cease once the country produces enough fuel locally. He questions the NMDPRA's decision to issue import licenses, arguing that it goes against the spirit of the act. He believes that the NMDPRA's move was to prevent scarcity and allow for competitive pricing, but it has also led to unnecessary inflation.
A Call for Action
Ukadike emphasizes the need for functional NNPC refineries to reduce the country's reliance on imports. He urges the NMDPRA to step in and address the issue, as the current situation is causing a strain on the economy and the masses.
State of Emergency
The IPMAN spokesperson, Chinedu Ukadike, calls on President Bola Tinubu to declare a state of emergency on the three refineries. He believes this move will help regulate prices and make the deregulation process more effective. Ukadike argues that competition, driven by functional refineries, will stabilize the economy and strengthen the currency.
Industry Perspectives
Billy Gillis-Harry, President of PETROAN, agrees that functional refineries could reduce the need for petrol importation. He emphasizes the importance of having a reliable supply of petroleum products to keep the economy running smoothly.
A Tale of Two Narratives
The debate over the future of government refineries has been a contentious one. While some, like Alhaji Aliko Dangote, believe they might never work again, others, like Bayo Ojulari, the new Group Chief Executive of the NNPC, remain optimistic. Ojulari has rejected calls to sell off the facilities, instead proposing a plan to assess their operational and commercial viability.
A History of Failed Attempts
The Federal Government's attempts to revive the refineries have been met with little success. Despite consistent resource allocation, the refineries remain unproductive. It is estimated that over $1.4 billion was approved for the rehabilitation of the Port Harcourt refinery in 2021, with similar allocations for the Warri and Kaduna refineries. Despite these efforts, the refineries have not shown any signs of improvement.
A New Era?
Bayo Ojulari has announced that NNPC Limited is currently in the "Technical and Commercial Review" phase, aiming to assess the refineries' operational state and determine their future. The company plans to engage Technical Equity Partners to operate world-class refineries, marking a potential new era for Nigeria's refining sector.
The Way Forward
As Nigeria grapples with its refining crisis, the question remains: will the government's latest efforts finally bring about the much-needed change? Only time will tell if these refineries can be transformed into sustainable, revenue-generating assets, meeting the country's fuel demand and aligning with international standards.
What's Your Take?
Do you think the government's plan to engage technical partners is the right move? Or should they consider selling off the refineries to private entities? Share your thoughts in the comments below!
