Nigerian business magnate Aliko Dangote has expressed concerns over the state of the country’s refineries, stating that the Nigerian National Petroleum Corporation’s (NNPC) four refineries would not attract buyers even if put up for sale. According to Dangote, the refineries are plagued by regulatory and investment challenges, which have created a difficult environment for investment.
Dangote attributed the current crisis in the downstream sector to regulatory mismanagement during the previous administration, citing the appointment of a trader as a regulator as a major mistake. He argued that a trader cannot effectively regulate the industry, leading to a mismatch that has discouraged both local and foreign investors. The business leader emphasized that the country is paying a high price for this mistake, which has resulted in a lack of investment in the sector.
The NNPC’s refineries, located in Port Harcourt, Warri, and Kaduna, have a total capacity of 445,000 barrels per day but have faced chronic underperformance despite significant allocations for maintenance. This has led to a reliance on fuel importation, further exacerbating the country’s economic challenges. Dangote warned that the environment is not conducive to investment in refineries, making it unlikely that anyone would purchase the NNPC’s refineries even if they were put up for sale.
The Nigerian government has struggled to revamp its refineries, with various attempts at rehabilitation and privatization efforts yielding little success. The lack of functional refineries has resulted in a significant burden on the country’s economy, with billions of dollars spent on fuel imports annually. Dangote’s comments highlight the need for urgent reform and effective regulation to attract investment and stimulate growth in the sector. As the country seeks to revamp its economy, the refineries’ situation remains a critical challenge that requires immediate attention and strategic planning.
