In a dramatic turn for Nigeria’s beleaguered refining sector, oil marketers and industry stakeholders have publicly endorsed the possible sale or privatisation of the Port Harcourt, Warri and Kaduna refineries currently under the management of the Nigerian National Petroleum Company Limited (NNPC).
This stance follows a blunt admission by NNPC Group Chief Executive, Bayo Ojulari, that despite trillions of naira spent on rehabilitation, the ageing refineries remain inoperable and their revival is “becoming a little bit more complicated” than anticipated.
Proponents argue that an open, transparent privatisation process could break what they describe as a “financial black hole” in Nigeria’s downstream sector and finally pave the way for lower, market-driven fuel prices.
NNPC’s Strategic Reassessment and the Possibility of Sale
Speaking on the sidelines of the 9th OPEC International Seminar in Vienna, Austria, on 10 July 2025, Bayo Ojulari conceded that years of investment—both financial and technological—have failed to restore full operations at Nigeria’s state refineries.
He revealed that NNPC has initiated a comprehensive strategic review, aiming to conclude by year‑end, and stressed that “sale is not out of the question. All the options are on the table, to be frank”.
Ojulari’s candour marks a departure from past administrations’ insistence on domestically reviving the refineries at all costs, and it has reignited debate on whether state ownership remains viable.
Marketers Rally for Privatisation to Drive Competition
Oil marketers, via associations such as MEMAN, DAPPMAN, PETROAN, IPMAN and NUPENG, have seized on Ojulari’s revelations to call for an inclusive privatisation process.
They argue that opening the downstream sector to multiple players will ensure efficiency, fair pricing and product availability.
Billy Gillis‑Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), endorsed privatisation as “the only reasonable decision” given the refineries’ history of chronic underperformance.
However, Gillis‑Harry cautioned against a politicised exercise, demanding clarity on the motives and stakeholder involvement from the outset.
“We need to be sure of what is driving this process and understand what is the influence behind it… PETROAN does a very well detailed empirical analysis. We do wish them well” — Billy Gillis‑Harry.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), echoed this call, warning that “competition, not monopoly, will ultimately drive efficiency and ensure availability of petroleum products”.
He went further, urging President Bola Tinubu to declare a state of emergency on the refineries if necessary, to break the cycle of underperformance and monopoly.
Aliko Dangote’s Stark Prognosis
Adding weight to the marketers’ arguments, billionaire industrialist Aliko Dangote publicly expressed doubt that the NNPC‑run refineries would ever function again.
During a tour of his own 650,000 bpd refinery in Lekki, he quipped that despite over \$18 billion spent on rehabilitation, “they may never work”.
Dangote contrasted this with the relative success of private investment, underscoring that mismanagement and obsolete infrastructure have made state‑run refineries structurally unsalvageable.
“If anybody tells you now that it is working, why are they now with Aliko? And Aliko will make his refinery work; not only make it work, he will make it deliver.” — Aliko Dangote.
The Call for Accountability: Investigations and Prosecutions
Energy economist Kelvin Emmanuel blasted the ongoing rehabilitation efforts as a “charade” and demanded that anti‑corruption agencies delve into what he described as “clear economic sabotage.”
He argued that proceeding with privatisation without addressing past mismanagement would amount to rewarding failure.
Emmanuel highlighted the need for investigations and potential prosecutions of former NNPC management under Mele Kyari, urging the Attorney‑General and the EFCC to act decisively.
“It would be a travesty if the EFCC and the AGF allow the immediate past management to go scot‑free without investigation.” — Kelvin Emmanuel.
Historical Spending and the Downstream Conundrum
Nigeria’s three state refineries have attracted massive funding with little to show:
- Port Harcourt: US\$1.4 billion approved for rehabilitation in 2021.
- Warri: US\$897 million earmarked in 2021.
- Kaduna: US\$586 million set aside in 2021.
- N100 billion spent on revamps in 2021 alone; N8.33 billion per month thereafter.
- US\$396.33 million on turnaround maintenance between 2013–2017.
Despite these outlays, all facilities remain largely moribund.
Expert Warnings: Efficiency vs. Ownership
Professor Emeritus Wumi Iledare, a veteran of petroleum economics, cautioned against a “hasty or sentiment‑driven sale,” arguing that privatisation must not repeat past mistakes or sacrifice national energy security.
He urged the adoption of hybrid models—public‑private partnerships and performance‑based concessions—aligned with the Petroleum Industry Act 2021’s commercial ethos.
“Ownership isn’t the core issue—inefficiency is… Selling the refineries without tackling systemic governance failures could repeat past mistakes and threaten energy security.” — Prof. Wumi Iledare.
Comparative Lessons: Global Privatisation Precedents
Internationally, downstream privatisation has yielded mixed results. In Brazil, the sale of certain Petrobras assets in the 1990s opened the market to competition and reduced fuel costs; however, poor regulatory oversight limited long‑term benefits.
The UK’s privatisation of BP in the 1980s initially spurred investment but later faced criticism for under‑investment in infrastructure.
Nigeria’s lesson is to embed robust governance, transparent bidding, and strict performance benchmarks in any privatisation deal.
Potential Market Outcomes
1. Lower Pump Prices: With competition, marketers could negotiate favourable ex‑depot rates, translating to at least a 10–15% reduction in retail fuel prices.
2. Improved Availability: Multiple operators could ensure continuous supply, eliminating chronic shortages and queueing.
3. Private Capital Inflows: Strategic investors, both domestic and international, would bring technical expertise and financing to modernise facilities.
4. Enhanced Regulatory Oversight: The Petroleum Industry Act 2021 mandates clearer roles for regulators, promoting accountability.
Risks and Mitigants
| Risk | Mitigant |
|---|---|
| Political Interference | Enshrine sale terms in law; parliamentary oversight |
| Elite Capture / Monopoly Re‑emergence | Mandate minimum participation of grassroots associations and SMEs |
| Under‑investment by New Owners | Performance‑based licence renewals; mandatory capital expenditure plans |
| Public Backlash Over Job Losses | Obligate new owners to retain key staff; invest in local content |
Recommendations for a Successful Privatisation
Transparent Bidding Process: Publish all tender documents, evaluation criteria, and bidder identities.
Stakeholder Engagement: Involve MEMAN, DAPPMAN, PETROAN, IPMAN, NUPENG and host communities from planning through handover.
Performance Bonds: Require new operators to post bonds guaranteeing rehabilitation milestones.
Regulatory Safeguards: Empower the Petroleum Regulatory Authority to enforce service‑level agreements.
Anti‑Corruption Measures: Mandate forensic audits of past spending before asset transfer.
Human Capital Development: Include clauses for workforce training and retention.
Conclusion
Nigeria’s state‑owned refineries have long epitomised the downstream sector’s inefficiencies, draining public coffers without delivering refined product to Nigerians.
The converging voices of NNPC’s leadership, private marketers, industry experts and independent economists signify a rare consensus: if revamp efforts continue, they risk perpetuating waste; if privatisation proceeds without rigour, it may merely shift the black hole to new owners.
What is clear is that choice is inevitable, and the stakes—fuel prices, economic stability and national dignity—could not be higher.
A meticulously planned, transparent privatisation, underpinned by strong governance and stakeholder buy‑in, offers the best path to break decades of stagnation, deliver competitive fuel pricing and ignite sustainable growth in Nigeria’s downstream oil sector.
