Nigeria to Restart Local Crude Oil Refining in Early August, National Petroleum Authorities Announce
The move marks the end of years of inactivity at the country’s state-owned refineries, with analysts predicting it could lead to lower fuel prices. The Nigerian National Petroleum Company (NNPC) made the announcement during an emergency session at the National Assembly, where lawmakers questioned central bank authorities, the national economic management team, and the NNPC about the country’s economic situation.
NNPC CEO Mele Kyari stated that one of the two Port Harcourt refineries in the Niger Delta region will commence operations in about two weeks.
He added that the second refinery is expected to be operational by the end of the year, which will allow Nigeria to start exporting refined oil.
“We’re very optimistic that by December this country will be a net exporter,” he said, “thanks to the combined output from our refineries, the Dangote refinery, and other smaller producers.”
The Dangote refinery is a privately owned facility under construction near Lagos.
Heineken Lokpobiri, Nigeria’s Minister of State for Petroleum Resources, also expressed confidence in the impact of the revived refineries.
“The oil and gas sector are the easiest way for Nigeria to overcome its economic challenges,” Lokpobiri stated. “We have a clear plan to gradually increase production. Our immediate goal is to reach and exceed 2 million barrels.”
This isn’t the first time officials have announced plans to resume domestic oil refining. Similar statements were made in December and March, but unforeseen technical issues delayed those efforts, authorities said on Monday.
The four government-owned refineries, capable of processing about 450,000 barrels of crude per day, have been idle for years. This inactivity has forced Nigeria to depend on imports to meet its petroleum needs, estimated at 66 million liters (17.4 million gallons) per day.
Oil industry analyst Faith Nwadishi expressed doubt about the refineries resuming operations.
“I’m cautiously optimistic because this could significantly ease the hardship and potentially reduce pump prices,” Nwadishi said. “However, as someone in the sector, I’m somewhat skeptical. We have an allocation of about 445,000 barrels per day for domestic consumption, which, if properly refined, would yield around 70 million liters, meeting our daily needs.”
In recent years, the Nigerian oil industry has been plagued by theft and corruption. On Monday, the Nigeria Extractive Industries Transparency Initiative reported that about 140,000 barrels of crude oil were stolen every day between 2009 and 2018.
