Nigeria’s refineries shut due to commercial losses, not technical failure – Osifo

Nigeria’s state-owned oil refineries have remained shuttered because of mounting commercial losses rather than mechanical breakdowns, according to remarks attributed to Osifo and reported by Business News Nigeria.

Nigeria operates four refineries under the Nigerian National Petroleum Company (NNPC) — two in Port Harcourt, one in Warri and one in Kaduna — with a combined installed capacity of around 445,000 barrels per day. Despite repeated rehabilitation programmes costing billions of dollars over more than a decade, the facilities have run well below nameplate capacity, leaving Africa’s largest crude producer dependent on imported refined fuels for the bulk of its domestic consumption.

Long-running underperformance

The persistent idleness of the plants has been a recurring source of public frustration in a country that exports crude oil but regularly queues for petrol. Successive administrations have pledged to revive the facilities, while the Petroleum Industry Act of 2021 set the stage for the NNPC to be restructured as a commercial entity and for the refineries to be concessioned to private operators. Those processes have moved slowly, and fuel imports have continued to dominate the downstream sector.

The framing of the shutdown as a commercial rather than technical problem, as reported by Business News Nigeria, shifts attention from engineering issues to the economics of running ageing, fuel-dependent plants in a fluctuating global oil market. Critics have long argued that the refineries’ problems are structural, rooted in decades of underinvestment, opaque management and the distortions of Nigeria’s former subsidy regime, which kept pump prices artificially low and discouraged local refining.

A changing downstream landscape

The picture is also evolving outside the NNPC system. The privately operated Dangote refinery, with a capacity of 650,000 barrels per day, began producing petrol in 2024 and has begun to alter Nigeria’s reliance on imports. Whether that new capacity will push the state company to resolve the commercial questions surrounding its own plants, or leave them permanently stranded, remains an open question for Africa’s largest oil producer.

Sources

This report was written from coverage published by the following news organisations. Follow the links for the original reporting.

• Business News Nigeria — Nigeria’s refineries shut due to commercial losses, not technical failure – Osifo