Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, suggested selling Nigeria’s non-functional refineries, highlighting that over N10 trillion has been spent on their maintenance. He argued that running the refineries without addressing their inefficiencies could lead to the world’s highest petrol costs, replacing pump subsidies with refinery subsidies. The National Assembly is investigating the alleged N11.3 trillion spent on refinery maintenance between 2010 and 2020.
Key Points:
- Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, advocated for selling Nigeria’s non-operational refineries due to the substantial expenditure of over N10 trillion on their maintenance.
- Nigeria has four state-owned refineries with a combined capacity of 445,000 barrels per day, all of which have been non-functional for years due to disrepair.
- The National Assembly is investigating the alleged N11.3 trillion spent by the Federal Government on turnaround maintenance for Nigeria’s refineries between 2010 and 2020.
- Oyedele warned that if the Nigerian refineries were to process crude oil without addressing their inefficiencies, it could lead to the highest petrol costs in the world, effectively replacing pump subsidies with refinery subsidies.
- The government has initiated another round of refinery rehabilitation for the Warri, Kaduna, and Port Harcourt refineries, with plans for their activation between December 2023 and 2024, according to the Minister of State for Petroleum Resources, Heineken Lokpobiri.
Analysis: Taiwo Oyedele’s call to sell Nigeria’s non-functional refineries underscores the need for a strategic reevaluation of the country’s approach to its refinery assets. The significant expenditure on maintenance without corresponding output highlights inefficiencies and questions the wisdom of continued investment. Balancing the potential benefits of refinery operation against the costs and considering alternative approaches, such as partnerships or private sector involvement, could provide a more sustainable path forward for Nigeria’s energy sector. Additionally, increased transparency and accountability in refinery spending are crucial to ensure optimal resource utilization and prevent further wastage.
