FG ADVISED AGAINST MORE SPENDING ON IDLE NNPC REFINERIES

The Federal Government has been urged to stop committing additional public funds to the rehabilitation of Nigeria’s idle state-owned refineries until the government establishes a clear commercial case for further investment.

Energy expert Dan Kunle made the call in an open letter to President Bola Tinubu, days after the President assured oil workers that the Port Harcourt, Warri and Kaduna refineries would return to operation.

Kunle argued that the government should first account for funds already spent on the facilities and determine why previous rehabilitation programmes failed to deliver sustained operations. He warned that past expenditure should not be used as a reason to justify further spending.

The four refinery facilities, comprising two plants in Port Harcourt, one in Warri and another in Kaduna, have a combined installed capacity of about 445,000 barrels per day but have remained largely inactive for years.

According to Kunle, the Federal Executive Council approved about $1.5bn for the rehabilitation of the Port Harcourt refinery in 2021, while another $1.484bn was approved for the Warri and Kaduna refineries.

He said the scale of previous expenditure made a forensic review necessary before additional funds were committed.

Kunle also cited historical records showing that the three refinery companies incurred substantial operating costs and accumulated losses over the years, while additional billions of naira were spent on rehabilitation and maintenance.

He argued that the challenges extend beyond the refineries themselves, noting that reliable crude supply pipelines, product evacuation infrastructure, storage facilities and terminals are essential for the plants to operate sustainably.

The expert therefore urged the Federal Government to consider transferring the refineries to the Bureau of Public Enterprises for possible privatisation or private-sector management.

He said some assets could be rehabilitated, while others might be better suited for concession, repurposing or complete replacement.

However, petroleum marketers have expressed support for the government's plan to revive the refineries. They argued that Nigeria needs multiple sources of refined petroleum products and should not depend on a single major refinery.

The debate highlights the wider challenge facing Nigeria’s state-owned refineries: whether continued public investment can restore them to commercially sustainable operations or whether alternative ownership and management models would deliver better value.

Kunle urged the government to prioritise transparency, independent financial assessment and commercial viability before approving further rehabilitation spending.