July 21, (THEWILL) — The $18 billion reportedly spent on the repairs of the Nigerian National Petroleum Company Limited (NNPCL) refineries constitutes a per capita contribution of N135,000 by 200 million Nigerians over 10 years.
Although various figures had featured as the cost of fixing the moribund refineries during the period, the recent statement by Alhaji Aliko Dangote, president of the Dangote Group, that over $18 billion had been spent on fixing the facilities may not be disregarded.
Using an exchange rate of N1,500/US$1, and other things held constant, 200 million Nigerians contributed $90 (equivalent of N135,000) each to fund the $18 billion (equivalent of N27 trillion) committed to the repairs of the four refineries over a decade.
Aliko Dangote, president of the Dangote Group, says he is sceptical that the Port Harcourt, Warri, and Kaduna refineries — owned by the NNPCL — will work again.
Dangote, who spoke on Thursday July 17, 2025, while hosting members of the Global CEO Africa from the Lagos Business School, after a tour of the Dangote Petroleum Refinery in Lekki, Lagos, was frontally skeptical about the moribund refineries ever reverting to active functionality.
The billionaire said more than 50 percent of the production of his refinery — a facility built after late President Umaru Musa Yar’Adua’s administration had blocked his bid to buy ailing NNPCL refineries — now goes to petrol, the commodity that had consumed the bulk of the nation’s foreign exchange earnings through importation.
“The refineries that we bought before, which were owned by Nigeria, were doing about 22 percent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government,” he said.
“And the managing director at that time convinced Yar’Adua that the refineries would work.
“They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18 billion on those refineries, and they are still not working. I don’t think so and I doubt very much if they will work.”
Dangote emphasised that the turnaround maintenance of the refineries “is like you trying to modernise a car that was built 40 years ago, when technology and everything have changed”.
“Even if you change the engine, the body will not be able to take the shock of that new technology engine,” he said.
Damgote’s claim resonated about two years after Reuters had published a similar report on May 31, 2023, to the effect that Nigeria spent more than 11.35 trillion naira ($25 billion) on fixing the country’s three moribund refineries in the previous 10 years, It quoted the outgoing parliament in a report, calling for a forensic audit of the matter.
Reuters noted that despite the huge amounts spent to rehabilitate the refineries, they were producing at less than 30 percent capacity, quoting the parliament – a situation that had kept the country reliant on fuel imports, which it subsidies to keep prices low.
The government had made empty promises through the NNPC that the refineries would resume production in no distant time. Into the era of empty promises to fix the refineries, the Senate on October 24, 2023, constituted an ad-hoc committee to investigate all contracts estimated at over N11.35 trillion awarded for the rehabilitation of the four moribund refineries in the country.
This followed a motion brought by Senator Sunday Karimu on the unending repairs of the nation’s refineries despite the huge resources invested in fixing them.
In graphic details, the lawmaker said, “Despite the moribund state of the four refineries, the operating costs of these refineries between 2010 and 2020 is estimated at N4.8 trillion naira. The refineries are estimated to make a cumulative loss of N1.64 trillion, within four years.”
He added, “We are concerned that the Federal Government of Nigeria has carried out rehabilitation projects in Port Harcourt Refinery Company (PHRC) over a period of seven years from 2013-2019 at an estimated cost of N12,161,237,811.61.
“In addition, on 18th March, 2021, a rehabilitation contract was executed between NNPC/PHRC and Tenenimont SPA at a Lump Sum of $1,397,000,000.00, about N75 billion naira amidst global public criticism, no result has been achieved.
“Phase 1 of the Project is expected to be completed in 28 Months after the contract, Phase 2 within 24 months and Phase 3 within 44 months of execution. Despite this, the Port Harcourt Refinery remains a money pit.
“Going by projections and representations from NNPCL the renovation works ought to be completed and operations of the Refinery commenced by June 2023.”
Senator Karimu expressed further concern that in a bid to revitalise the Warri Refinery, the Federal Government injected huge public funds into revamping the facility to the tune of over N28, 219, 110, 067.10 between 2014 and 2019.
The Senate, consequently, constituted a 7-member ad-hoc committee to investigate the matter and to submit their findings to the upper legislative chamber within four weeks – November 21, 2023. No report was submitted.
However, in a dramatic turn of events, the NNPCL on August 30, 2024 announced that it was seeking private Operations and Maintenance (O&M) companies to bid for the Warri and Kaduna refineries (while repairs of the Port Harcourt refinery were in progress).
“NNPC Ltd is seeking to engage reputable and credible Operations & Maintenance (O&M) companies to operate and maintain two of its refineries, Warri Refining and Petrochemical Company (WRPC) and Kaduna Refining and Petrochemical Company (KRPC), to ensure reliability and sustainability to meet the nation’s fuel supply and energy security obligations,” the company said in a circular.
As expected, this was not achieved. Instead, the plants suddenly begun production, according to NNPCL, following the commencement of petroleum products by the Dangote Refinery on September 3, 2024.
NNPC had been working to revamp the refineries, which were shut down entirely in 2021 and produced little or no fuel over the past decade.
In a dramatic coincidence, Nigeria’s four moribund refineries, which had laid comatose for well over two decades, returned to live. This happened at a time Dangote Petroleum Refinery has begun production and inching close to full capacity operations.
Dangote Petroleum Refinery, the largest single train refining plant in the world, took the globe by surprise when it commenced actual production of petrol on September, 3, 2024 — shocking sceptics and snubbing mortified government officials who saw the new facility as a threat.
Although Dangote achieved the feat through thick and thin underlying several unsuccessful attempts to start production, September 3, 2024 remained indelible in the annals of Nigeria’s economic history: the much-desired petrol rolled out from a Nigerian refinery, other than the NNPC plants, after 28 years.
Following the Dangote ‘magic’, the four state-owned refineries (Warri, Kaduna and two in Port Harcourt), which are run by the NNPCL, “commenced production”. The second Port Harcourt Refinery was said to be at the verge of commencing production “without prior announcement”.
The Port Harcourt Refinery which was announced to have commenced production on November 26, 2024, was shut down in May for a three-month maintenance, corroborating the fears of Alhaji Dangote that the refining facilities may have gone into perpetual closure.
There are indications that the refineries may eventually be sold to terminate the unending repairs that constitute a drain pipe to the economy. The Group Chief Executive Officer of NNPCL, Bayo Ojulari, has said the company is considering selling some of its refineries as it grapples with challenges in their rehabilitation.
Speaking in a recent interview with Bloomberg at the 9th OPEC International Seminar in Vienna, Austria, Ojulari said a strategic review of NNPC’s refinery operations was underway and expected to be concluded before the end of the year.
“So we’re reviewing all our refinery strategies now. We hope before the end of the year, we’ll be able to conclude that review. That review may lead to us doing things slightly differently,” he said.
When asked if that could include putting the refineries up for sale, Ojulari said, “But what we’re saying is that sale is not out of the question.”
“All the options are on the table, to be frank, but that decision will be based on the outcome of the reviews we’re doing now.”
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
