The Port Harcourt Refining Company (PHRC) in Rivers State has commenced crude oil processing, marking a significant milestone for Nigeria’s energy sector.
This development, confirmed by the Chief Corporate Communications Officer of the Nigerian National Petroleum Company Limited (NNPCL), Femi Soneye, on Tuesday, is expected to foster competition in the refining industry, potentially leading to more affordable petroleum products for Nigerians.
“Today marks a monumental achievement for Nigeria as the Port Harcourt Refinery officially commences crude oil processing. This groundbreaking milestone signifies a new era of energy independence and economic growth for our nation,” Soneye declared.
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He also commended President Bola Ahmed Tinubu, the NNPCL board, and Group Chief Executive Officer (GCEO) Mele Kyari for their dedication to this transformative project.
Background of the Port Harcourt Refinery
The Port Harcourt refinery, one of Nigeria’s largest, was shut down in 2019 due to a lack of functionality. In 2021, the Federal Government approved $1.5 billion for its rehabilitation, a project that has faced numerous delays over the years.
Initial promises by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, placed the refinery’s start date in September 2023, later postponed to December. In March 2024, GCEO Mele Kyari further adjusted expectations, projecting an April launch date.
Despite these missed deadlines, Kyari reiterated in August 2024 that the refinery was a critical part of efforts to restore Nigeria’s refining capacity.
A Shift in Nigeria’s Energy Sector
The refinery’s reopening is a significant step toward reducing Nigeria’s reliance on imported petroleum products. Although the country is a major crude oil producer, it has long struggled with inadequate refining capacity, leading to a dependency on costly fuel imports. This situation was worsened by Nigeria’s crude-for-petrol swaps and years of fuel subsidies, which drained foreign exchange reserves.
The commencement of operations at the Port Harcourt refinery comes shortly after the Dangote Refinery began producing diesel and aviation fuel in September 2024. The Dangote Refinery hailed as the largest single-train refinery in the world, represents another key milestone in Nigeria’s efforts to meet domestic fuel demand.
With both the Port Harcourt and Dangote refineries operational, Nigerians hope for relief from the soaring fuel prices that followed the removal of subsidies earlier in 2024. The cost of petrol skyrocketed from approximately N200 per liter to over N1,000 per liter, contributing to widespread economic hardship.
NNPCL has also announced plans to expedite the restoration of the Warri Refinery to further bolster domestic production capacity. Mele Kyari expressed optimism that these efforts will enable Nigeria to become a net exporter of petroleum products by 2024.
“We are focused on delivering this rehabilitation project, our two other refineries, and all other investments towards revamping the nation’s refining capacity,” Kyari stated during a visit to the Port Harcourt Refinery in August 2024.
Fostering Competition
The resumption of operations at the Port Harcourt refinery introduces competition in Nigeria’s refining sector, which has long been dominated by imports due to insufficient local capacity. With the Dangote Refinery already operational, producing diesel and aviation fuel since September 2024, the Port Harcourt facility is expected to challenge market monopolies, improve supply dynamics, and stabilize prices.
NNPCL has also announced plans to privatize the Port Harcourt refinery for better efficiency and profitability. The privatization effort aligns with the government’s broader strategy to restructure the oil and gas sector, attract private investment, and reduce operational inefficiencies that have plagued state-owned refineries.
Regional Benefits
While the Port Harcourt refinery’s production capacity is significantly lower than that of the Dangote Refinery—designed as the world’s largest single-train refinery—its strategic location is expected to offer unique advantages. The refinery will serve consumers in Nigeria’s eastern region, where the high cost of logistics associated with transporting petroleum products from other parts of the country has driven up prices.
The resumption of operations at the Port Harcourt refinery, coupled with Dangote Refinery’s contributions, underlines a shift in Nigeria’s energy landscape. These developments are expected also to reduce the country’s reliance on costly fuel imports, alleviate foreign exchange pressures, and provide a buffer against global oil price volatility. For ordinary Nigerians, the hope remains that these changes will translate into more accessible and affordable energy.
The refinery’s reopening and the broader push for efficiency through privatization reflect a significant step forward. However, energy analysts believe that the ultimate test will be how these reforms impact consumers, the economy, and the long-term sustainability of the oil refining sector.