Following the seemingly botched repairs of the Port Harcourt and Warri refineries, after both plants gulped about $2.4bn and returned to dormancy within six months of operation, the Organised Private Sector and oil marketers have called for the immediate privatisation of the facilities.
However, the regulatory agency of the midstream and downstream arms of the oil sector said the privatisation of these plants would only happen if approved by the Federal Executive Council, as officials of the Nigerian National Petroleum Company Limited and the Federal Ministry of Petroleum Resources stayed mute on the latest call by the OPS.
The PUNCH reports that calls for the privatisation of the government-owned refineries, under the management of NNPCL, intensified following the shutdown of the 60,000 barrels-per-day old Port Harcourt Refining Company, six months after it was declared operational.
The PUNCH recalls that the Warri Refining and Petrochemical Company was shut down in January, barely a month after it was declared operational. It was reported that the Federal Government had spent up to $2.4bn on the turnaround maintenance of the facilities.
In an interview with The PUNCH, the Executive Secretary and Chief Executive Officer of MEMAN, Clement Isong, said MEMAN had consistently requested that the facilities be handed over to professional refinery managers.
Isong said Nigeria needed the refinery to avoid a single source of fuel distribution or supply, saying there should be healthy competition with the Dangote Petroleum Refinery.
“I have been consistent. We need those refineries. We need them to work. And we have been consistent in proposing that the refineries be handed over to professional refinery managers, whether with or without a stake, in order to ensure that there is some competition with Dangote. We think that competition is always important in the sector,” Isong said.
Asked if he meant the NNPC cannot run the refineries effectively, Isong reacted that the refineries might be suffering from political interference and the perception of the NNPC’s social role. These, he said, had prevented the NNPC from taking hard decisions like reducing its staff strength, like a private business would do.
“History has shown that the challenge may be a result of the political interference in the past and the perception of its social role. Those are the two things that have prevented NNPC from taking hard decisions. For instance, a private enterprise will have optimal staff strength, whereas NNPC will struggle to reduce its staff strength because there could be a crisis as it struggles to manage its relationship with the union,” he maintained.
Speaking further, Isong explained that the refineries are also being affected by the government’s inability to manage its economic environment and costs. He emphasised that the private sector has consistently outperformed government-owned corporations.
Isong added that nobody could harass Aliko Dangote, knowing well that he is running a private business. “There is also the inability of the government to manage its economic environment and costs. The private sector, historically, in every geography, has done better. Government-owned corporations struggle because of their perceived social role. The private sector is much better at managing this decision-making simply because stakeholders understand that they are privately owned.
“Stakeholders behave differently when they know you’re government-owned; they challenge differently. But if you’re private, nobody can harass you. Nobody can harass Dangote, he’s running his business; it’s his pocket,” he stated.
OPS reacts
Speaking with one of our correspondents, the Chairman of the Organised Private Sector of Nigeria, Dele Oye, said privatisation of the refineries was long overdue. Oye said the government should not be involved in running a business, considering its performance in the past.
Rather, the OPS leader noted that the government should be making policies and laws based on the private sector’s advice.
“The privatisation of government refineries is long overdue. The government has no business in business, judging by their performance in business. They should be making policies and laws based on the private sector’s advice and input,” he stressed.
According to him, the involvement of the government in running the refineries was not helpful to either the government or the general public, as he noted that the government should retain the role of a regulator and facilitator.
“Their involvement in running the refineries has not been helpful to both the government and the general public. They should stay as regulators and facilitators,” stressed.
Similarly, the President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, said the call for the privatisation of Nigeria’s refineries was not only tenable but necessary. He regretted the shutdown of the refineries after spending over $2bn for maintenance, stressing that this showed a systemic failure in the public sector.
Egbesola argued that injecting funds into a project without addressing the real challenge would be an effort in futility.
“The fact that about $2.5bn was spent on turnaround maintenance, only for the refineries to shut down again within six months, highlights a systemic failure in public sector management. It’s a painful reminder that throwing money at a problem without reforming the underlying structure is a futile exercise,” he said.
He stressed that if privatisation was done transparently, it would offer a pathway to efficiency and higher productivity, referencing Dangote as an example.
“Privatisation, if done transparently and with the right regulatory framework, offers a pathway to efficiency, sustainability, and improved productivity. We have seen how private-led initiatives like the Dangote refinery are making significant strides where public ventures have failed.
“However, the process must be open, competitive, and designed to attract genuine investors, not political proxies. The goal should be to ensure that these national assets finally deliver value to Nigerians, not drain our resources any further,” Egbesola stated.
The Centre for Promotion of Private Enterprise endorsed the position of major oil marketers who called for the privatisation of the national refineries, stating that the country has not seen value for money despite government investments to activate the refineries.
In an interview with The PUNCH, CPPE Director Dr Muda Yusuf noted that Nigeria’s refineries, which are largely non-functional despite the Federal Government injecting $2.4bn, would be better operated by private operators. He recommended either a total or partial equity sale.
He explained, “The best option we have as far as the current government refineries are concerned is privatisation. We could sell it off completely so that the government can exit from the operations of the refineries, or we could sell about maybe 51 per cent of it and give controlling shares to the private sector, adopting the Nigeria Liquefied Natural Gas model.”
When contacted, the spokesperson for the Nigerian Midstream and Downstream Petroleum Regulatory Authority, George Ene-Ita, said the decision to privatise the refineries is solely a decision to be taken by the executive arm of the government.
Ene-Ita, in an interview, said, “That question has nothing to do with the authority. That is an executive decision. It has nothing to do with the NMDPRA. Our job is to go out, verify, and regulate facilities. But whether they are privatised or commercialised or housed wherever they are is not our call.”
The NNPC spokesperson, Olufemi Soneye, did not reply to messages sent to him as of press time. However, on May 24, Soneye confirmed to one of our correspondents that the Port Harcourt refinery would be shut for one month for maintenance.
“NNPC Ltd wishes to inform the general public that the Port Harcourt Refining Company will undergo a planned maintenance shutdown. This scheduled maintenance and sustainability assessment will commence on May 24, 2025,” he said.
Soneye added that the company is working with relevant stakeholders to ensure efficiency and transparency during the exercise. “We are working closely with all relevant stakeholders, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority, to ensure the maintenance and assessment activities are carried out efficiently and transparently.
“NNPC Ltd remains steadfast in its commitment to delivering sustainable energy security for Nigeria. Further updates will be provided regularly through our official channels, including our website, media platforms, and public statements,” he stated.
But marketers in Eleme, the community hosting the refinery, told The PUNCH that they have not seen any sign of maintenance activity within the facility.
Recall that a former Vice President and Presidential Candidate of the People’s Democratic Party in 2023, Atiku Abubakar, had once proposed the privatisation of the refineries, but the suggestion was rejected by the Muhammadu Buhari administration.