Fuel Price Crisis: Whither Nigeria’s Refurbished Refineries?

If anything aptly depicts Nigeria’s lingering macroeconomic instability and volatility, it is the raising and reduction in the pump prices of fuel (Premium Motor Spirit, PMS). Hardly has there been any month in 2025 that the refineries, fuel marketers and distributors did not announce an upward or downward adjustment in the prices of PMS at the pump.

Dangote Refinery, for instance, has adjusted its petrol pump price for no less than six times within the first six months of 2025. In early February, the company announced a reduction in its ex-depot petrol price from N950 to N890 per liter. In March, the refinery further slashed the price; it also did so in April and May to hit N825 per liter.

However, this June, the refinery increased the ex-depot price of its PMS to N880 per liter, representing a hike of N55 from the previous rate of N825 per liter. Expectedly, this increment has sent ripples across the entire fuel distribution chain, pushing pump prices to the range of N900—N1000 per liter in various locations.

In tandem with Dangote’s moves, the Nigeria National Petroleum Company (NNPC) Limited, has also been adjusting PMS pump prices through its retail outlets. Indeed, as a ‘price taker’, in the latest price adjustment, it raised its PMS to N945 per liter from the previous level of N870 per liter. As it is, the ‘price leader’ is the Dangote Refinery, which, in recent times, has been importing crude oil from the U.S. and other places for its operations.

While the Dangote Refinery is responding to the vagaries in the movement of crude prices in the global market, the NNPC also adjusts PMS prices based on the prevailing international gasoline prices and foreign exchange rates, in line with the provisions of the Petroleum Industry Act (PIA).

On their own part, independent petroleum marketers have also this June, raised prices of their PMS by between N50—N60 per liter. They now sell at around N1000 per liter, depending on the location. These prices are still very likely to go up in next few days, and weeks.

In all of these PMS pump price adjustments, nowhere is the impact of the ‘recently refurbished’ and restreamed public refineries in Port Harcourt, Warri and Kaduna noticed. If anything, the said refineries, from all indications, would seem to have fallen into a worse condition than before their purported repairs.

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Having failed severally to achieve promised refurbishment of these oil refineries for several years, the NNPCL under its erstwhile Group CEO, Mele Kyari, late 2024, announced the resumption of operations of the Warri and Port-Harcourt refineries. However, no sooner than those announcements were made than the refineries relapsed into worse dysfunctional state.

It was not until April 2, 2025 that President Bola Ahmed Tinubu sacked Kyari and his topmost management team that the rot in the entire refineries’ repair saga began to unravel. Humongous public funds in Naira and dollars have been claimed to have been sunk into unexecuted Turnaround Maintenance (TAM) of the refineries over the years.

In recent times, the media space in Nigeria has been awash with screaming headlines, showing the monumental fraud and embezzlement that hallmarked the claimed repair of those refineries. Top officials of the NNPCL were reported to have been picked up by law enforcement agencies over an “alleged US$7.2 billion fraud linked with the rehabilitation of the Kaduna, Warri and Port-Harcourt refineries,” according Channels Television.

Reported to have been arrested by the operatives of the Economic and Financial Crimes Commission (EFCC) were the former Chief Financial Officer of the NNPCL, a former Managing Director of the Warri Refinery, two ex-CEOs of the Port-Harcourt Refinery, among others.

While these former and current oil chiefs are being taken through the toothcomb of the law, the direct impact of their indiscretion is on all economic agents. The refineries are not working; they are not adding to the local supply of PMS, which is an ‘essential’ commodity for businesses and households in Nigeria.

To the citizenry, the direct implication of the series of adjustments in PMS prices has been spikes in transportation costs, soaring food prices, rising tenancy rents, etc. Like the fuel subsidy removal in May 2023 which drove PMS prices through the roof, and triggered runaway inflation, frequent fuel price adjustments cause indeterminate distortions in the economy.

In all, however, the relapse of the Warri and Port-Harcourt refineries into worse decrepit state after the claimed repairs, is a pointer to the murky waters of the oil refining business in Nigeria. But for the Dangote Refinery that fought and won a pyrrhic victory over the chicaneries of the officialdom, what would have become of the so-called liberalization of the downstream oil sector?

Put differently, out of the so many licensed refineries in Nigeria, it is only Dangote Refinery that was able to, against all odds, take off effectively. Today, nominally, there are more than a dozen refineries in Nigeria; but, how many are in commercial operations?

Apart from the Dangote Refinery with the largest capacity in Africa, there are the Kaduna, the (old and new) Port-Harcourt and Warri refineries. Other refineries include Waltersmith Refinery, Azikel Refinery, Ogbele Refinery, Edo Refinery, Duport Refinery, Niger Delta Refinery (Aradel), OPAC Refinery (Delta State), and Alexis Refinery, etc.

Unfortunately, inadvertently or otherwise, the regulatory and operating climate in the refining sub-sector would seem to have stifled most of the refineries. The public-owned ones have unfortunately remained a cesspool of corruption and thieving—leading to the ever moribund state of the refineries.

Had the over 450, 000 barrels per day combined capacity (public) refineries been running optimally, Nigerians would have been saved the trouble of fuel price crises that have become a feature of the country. The persisting frequent adjustment in PMS prices is a vivid pointer to near total failure of the reforms in the downstream sector of the oil and gas industry.

It is high time the Government of the day mustered the political will and courage to fully privatize the (public) refineries on “as is, where is” basis. Covertly or otherwise, the continued ‘existence’ and ‘operations’ of those refineries have become a serious drag on the thriving of the refining sector in Nigeria.

Those (public) refineries should no longer be refurbished and owned/run by the Government. Even their nuisance value is already too much harm to the economy!

• The author, Okeke, a practicing Economist, Business Strategist, Sustainability expert and ex-Chief Economist of Zenith Bank Plc, lives in Lekki, Lagos. He can be reached via: [email protected] (08033075697) SMS only