The Nigerian National Petroleum Company Limited (NNPCL) has once again failed to meet its self-imposed deadline to begin fuel production at the Port Harcourt refinery, despite multiple previous promises from both the company and the Federal Ministry of Petroleum Resources.
This marks the sixth postponement of operations at the refinery, originally scheduled to commence in August 2024. The missed deadline has further fueled public frustration, with Nigerians now calling for the dismissal of the NNPCL’s Group Chief Executive Officer, Mele Kyari, over his repeated failure to deliver on these promises.
Umar Ajiya, NNPCL’s Chief Financial Officer, had assured the public in August that the Port Harcourt refinery would start producing petroleum products by September, with supplies ready for testing before distribution to the domestic market. However, as September passed without any activity, no update was provided from the NNPCL, deepening the sense of distrust among Nigerians.
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In the wake of this latest failure, contractor Maire Tecnimont SpA, which is overseeing the rehabilitation of the refinery, has indicated that it will provide an update by or before October 2, 2024. This commitment came through a law firm, Olajide Oyewole LLP, in response to inquiries by Senior Advocate of Nigeria (SAN) Femi Falana, who had sought details on the rehabilitation project’s timeline, The Punch reported.
The firm stated that Maire Tecnimont SpA is considering Falana’s letters, dated September 17 and 24, regarding the project and would respond accordingly.
Since the project began, promises from NNPCL about the refinery’s completion have consistently fallen. The 210,000-barrels-per-day Port Harcourt refinery, which has been in operation since 1965 but has become moribund over the years, was expected to achieve mechanical completion by December 2023. NNPCL had previously stated that the facility would start refining 60,000 barrels of crude oil per day shortly thereafter. But those deadlines, like many before them, have passed without progress, leaving Nigerians increasingly skeptical.
This latest delay is particularly embarrassing for NNPCL, as its CEO Mele Kyari has repeatedly assured the public that Nigeria was on track to become a net exporter of petroleum products by the end of 2024.
In mid-2023, Kyari confidently told the Senate that the Port Harcourt refinery would begin production in early August and that the country would finally reduce its reliance on fuel imports.
“I can confirm to you, Mr. Chairman, that by the end of the year, this country will be a net exporter of petroleum products,” Kyari declared in a Senate hearing.
However, as the months have gone by, these statements have proven hollow, leading to calls for his resignation.
Social media platforms have been abuzz with criticism, with many citizens accusing Kyari of overseeing a failing institution that has been unable to revive the country’s refineries. There is growing sentiment that a leadership change at the NNPCL is necessary if Nigeria is ever to achieve its refining goals.
Nigerians’ frustrations have also revived discussions about the long-standing proposal to privatize the country’s refineries, a move that has been championed by former Vice President Atiku Abubakar. Atiku has been a vocal critic of the government’s approach to managing state-owned refineries, arguing that continuous spending on their rehabilitation has drained public funds with little to show for it.
In March 2021, the government secured a $1.5 billion loan to rehabilitate the Port Harcourt refinery, a move that Atiku strongly criticized at the time, calling it wasteful. The Peoples Democratic Party’s presidential candidate has consistently advocated for the sale of the nation’s refineries to private investors, stating that only privatization can bring in the necessary expertise and efficiency to get these facilities running.
“We should not continue wasting billions of dollars on refineries that have become bottomless pits,” Atiku said during his presidential campaign, stressing that selling the refineries would allow the government to focus on other critical areas of the economy.
The former Vice President has also pointed out that Nigeria has already spent over $4 billion in a bid to rehabilitate its refineries over the years, with little success. Aliko Dangote, the billionaire industrialist and owner of the upcoming Dangote Refinery, has echoed similar sentiments, stating that the government’s refinery rehabilitation efforts have been costly and ineffective. In a public address, Dangote revealed that despite the government’s efforts, Nigeria still relies heavily on imported fuel, costing the country up to N2 trillion every month.
Many have argued that by continuing to pour money into state-owned refineries, the government is not only mismanaging public funds but also depriving the economy of critical investment that could be directed toward other areas like education, healthcare, and infrastructure. Proponents of privatization believe that selling the refineries to private investors would not only save the government money but also enable the private sector to efficiently manage the facilities, ensuring that they operate profitably and reliably.
Despite these calls for privatization, the government under both former President Muhammadu Buhari and incumbent President Bola Tinubu has remained reluctant to fully divest from the refineries. This reluctance has only deepened the frustration of many Nigerians, who feel that the government’s unwillingness to sell off these underperforming assets is a major roadblock to the country’s economic progress.
The broader economic implications of the refinery delays are also significant. Nigeria, one of the world’s largest producers of crude oil, has been paradoxically dependent on imported fuel for decades due to its lack of refining capacity. This reliance on imports has contributed to high fuel prices, fuel scarcity, and a costly fuel subsidy regime that further burdens the government’s budget. Many citizens believe that privatizing the refineries would not only save the government billions in rehabilitation costs but also reduce the country’s reliance on foreign fuel.
The ongoing delays at the Port Harcourt refinery highlight the broader structural challenges facing the country’s oil and gas industry. However, with the Dangote Refinery set to begin full operations soon, there is hope that it will alleviate some of the pressure on the country’s refining capacity.