A Cycle of Investment and Idleness
The latest shutdown of the 60,000 barrels-per-day old Port Harcourt Refining Company, just half a year after its much-touted return to operation, has particularly fueled public frustration. This follows closely on the heels of the Warri Refining and Petrochemical Company’s similar fate, which ceased operations in January, barely a month after its operational declaration. These repeated failures, despite significant financial injection for turnaround maintenance, paint a grim picture of systemic challenges within the public sector's management of industrial facilities.
The Case for Professional Management
Industry stakeholders are unequivocal in their demand for a paradigm shift. Clement Isong, Executive Secretary and CEO of the Major Oil Marketers Association of Nigeria (MEMAN), has consistently advocated for handing over the refineries to "professional refinery managers." Isong stresses the crucial need for these refineries to operate effectively to foster healthy competition with privately-owned entities like the Dangote Petroleum Refinery, thereby mitigating the risks associated with a single source of fuel distribution.
When pressed on whether the Nigerian National Petroleum Company Limited (NNPCL) is incapable of running the refineries effectively, Isong pointed to historical political interference and the perception of NNPCL's social role as major impediments. He argued that these factors prevent the NNPCL from making tough, commercially sound decisions, such as optimizing staff strength – a standard practice for private enterprises focused on efficiency and profitability.
Isong further elaborated on the government's struggles in managing the economic environment and costs associated with these ventures, asserting that the private sector consistently outperforms government-owned corporations globally. He highlighted the distinct difference in stakeholder behavior when dealing with private entities, noting that private business owners like Aliko Dangote are generally immune to the kind of "harassment" or undue influence often experienced by government-run operations.
The OPS Echoes the Call
The sentiment for privatisation is strongly echoed by other prominent figures within the Organised Private Sector. Dele Oye, Chairman of the Organised Private Sector of Nigeria, declared the privatisation of government refineries "long overdue." He firmly believes that the government's role should be confined to policy-making and regulation, guided by the private sector's insights, rather than direct involvement in business operations, where its track record has been underwhelming.
Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria, reinforced this stance, deeming the call for privatisation not just tenable but "necessary." He lamented the squandering of over $2 billion on maintenance only for the refineries to shut down again, citing it as clear evidence of "systemic failure in public sector management." Egbesola emphasized that merely injecting funds without addressing underlying structural issues is a futile exercise. He advocated for a transparent and competitive privatisation process that attracts genuine investors, referencing the success of the Dangote refinery as a testament to private-led initiatives.
Dr. Muda Yusuf, Director of the Centre for Promotion of Private Enterprise (CPPE), also endorsed the privatisation push, emphasizing the lack of "value for money" despite significant government investments. He proposed either a complete sell-off or a partial equity sale, suggesting a model similar to the successful Nigeria Liquefied Natural Gas (NLNG) project, where the private sector holds a controlling share.
Regulatory Stance and Official Silence
In response to the growing calls, George Ene-Ita, spokesperson for the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), clarified that the decision to privatise the refineries rests solely with the executive arm of government. He stated that the NMDPRA's mandate is limited to regulating facilities, not determining their ownership structure.
Notably, officials from the Nigerian National Petroleum Company Limited (NNPCL) and the Federal Ministry of Petroleum Resources have remained silent on the latest appeals for privatisation. This silence, coupled with the recurring operational failures, further amplifies public frustration and fuels speculation about the future of these strategic assets.
A History of Broken Promises and Political Battles
The current predicament is not an isolated incident but rather a continuation of a long-standing saga surrounding Nigeria's refineries. Former Vice President Atiku Abubakar had previously advocated for their privatisation, a suggestion vehemently rejected by the past administration. In 2024, the NNPCL itself announced its intention to seek private operators to run the rehabilitated Port Harcourt and Warri refineries, signaling an implicit acknowledgment of its own operational limitations. However, this move appears to have stalled or failed to yield the desired results.
Atiku Abubakar has consistently criticized successive governments for failing to heed his advice on privatising the refineries and reforming the oil sector, highlighting the substantial loans secured for rehabilitation while the facilities remained idle and incurred significant staff salaries.
Recent reports from the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) further exacerbate concerns, stating that the NNPCL refineries are not optimally producing petrol but rather naphtha. This implies that even when "operational," their output might not directly address the nation's pressing fuel needs.
The Ongoing Debate
While the NNPCL has, at various times, asserted the operational status of the refineries, such claims have often been met with skepticism and later contradicted by official reports. For instance, despite the NNPCL's November 2024 announcement of the Port Harcourt refinery operating at 70% capacity and producing various petroleum products, an April 2025 report by the NMDPRA indicated it was operating below 40% capacity before its latest shutdown for "maintenance."
The consistent underperformance and the cycle of repairs followed by dormancy have led figures like former President Olusegun Obasanjo to voice strong skepticism about the NNPCL's capacity to manage these facilities. Obasanjo famously recounted how even international oil companies like Shell declined to operate the refineries, and how a previous attempt by Nigerian investors, including Aliko Dangote, to acquire them was reversed. He highlighted the billions squandered without tangible results, starkly contrasting it with the anticipated success of privately-run refineries.
The ongoing debate underscores a fundamental question: Can Nigeria afford to continue pouring vast sums into state-owned refineries that consistently fail to deliver, or is it time for a decisive shift towards private sector involvement to ensure their efficient operation and contribute meaningfully to the nation's energy security? The growing chorus from the Organised Private Sector and oil marketers suggests the answer is unequivocally the latter. The ball is now firmly in the court of the Federal Executive Council to make a decision that could profoundly impact Nigeria's economic future.