The Nigerian government has confirmed its plans to privatize the country’s four government-owned refineries in Port Harcourt, Warri, and Kaduna, aiming to improve local oil refining capacity. This initiative was disclosed by Sunday Dare, the Special Adviser to President Bola Tinubu, who highlighted that full privatization is underway, with the aim of ending fuel queues as local refining capacity is gradually increased. The involvement of major private refineries such as Dangote and modular refineries is expected to help meet the country’s refining needs.
Experts have shared mixed opinions on the privatization move. Professor Wumi Iledare, an expert in Petroleum Economics, stressed that the Petroleum Industry Act (PIA) 2021 should guide decisions on oil and gas reforms, emphasizing that the Nigerian National Petroleum Company Limited (NNPCL) board, not the government, should decide the future of the refineries. On the other hand, the Managing Director of 11Plc, Tunji Oyebanji, expressed support for privatization, arguing that private firms with the right expertise would lead to better results, given the challenges the government faces in managing the refineries.
The proposal for privatization has sparked debate among stakeholders. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised concerns about the government’s rush to privatize the refineries, citing past issues with mismanagement and pipeline vandalism. PENGASSAN advocates for a model similar to the Nigeria Liquefied Natural Gas (NLNG) partnership, where the government holds 49% ownership, ensuring private investors have the majority stake. The country’s four refineries, with a combined refining capacity of 570,000 barrels per day, have long struggled with maintenance issues, making privatization a key part of Nigeria’s efforts to enhance its refining sector and reduce dependency on fuel imports.
