Aliko Dangote, founder and president/chief executive of the Dangote Group, has expressed doubt over the future functionality of Nigeria’s state-owned refineries.
Mr Dangote who spoke on Thursday during a facility tour with members of the Global Chief Executive Officer Africa group from Lagos Business School at the Dangote Petroleum Refinery in Lekki, Lagos, explained that the state-owned refineries managed by the Nigerian National Petroleum Company Limited (NNPC Ltd) have consumed about $18 billion in public funds without yielding results.
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He added that his 650,000 barrel-per-day (bpd) refinery was constructed after the government of late President Umar Yar’adua declined to sell the refineries to him.
“The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent of Premium Motor Spirit (PMS). We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government.
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“And the managing director at that time convinced Yar’adua that the refineries would work. They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18billion on those refineries, and they are still not working. And I don’t think and I doubt very much if they will work,” Mr Dangote said.
He said that the turnaround maintenance of the refineries “is like you trying to modernise a car that was built 40 years ago, when technology and everything have changed.”
“Even if you change the engine, the body will not be able to take the shock of that new technology engine,” he added.
NNPC speaks on sale
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Ojulari, seems to corroborate Mr Dangote’s concerns, stating that the company is considering selling the refineries due to the complexity of rehabilitation.
Speaking with Bloomberg on Thursday at the 9th OPEC International Seminar, Mr Ojulari said a strategic review of NNPC’s refinery operations is underway and expected to be concluded before the end of the year.
“We’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently,” he said.
Asked if that could include selling off the refineries, Mr Ojulari said, “What we’re saying is that sale is not out of the question. All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”
In November last year, the presidency announced that plans for the complete privatisation of Nigeria’s state-owned refineries are currently underway.
READ ALSO: Court to hear Dangote Refinery’s suit seeking to block petroleum products importation into Nigeria
Nigeria has four major refineries, two in Port Harcourt, Rivers State, which combine to form the Port Harcourt Refining Company (PHRC) with a combined installed capacity of 210,000 barrels per day (bpd); the Kaduna Refining and Petrochemical Company Limited (KRPC) with an installed capacity of 110,000 bpd; and the Warri Refining and Petrochemical Company Limited (WRPC) with an installed capacity of 125,000 bpd.
All the refineries have a combined installed capacity of 445,000 barrels per day.
Despite significant financial injections, the refineries continue to face operational challenges, with public records and site visits revealing that the facilities have largely failed to resume meaningful operations.
The Warri Refinery, which was reopened in December 2024, shut down in January due to safety issues. In May NNPC announced the shutdown of Port Harcourt Refinery.
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