Business Briefings
Dangote Says Fixing Nigeria’s Refineries Might Be a Lost Cause
Aliko Dangote, President and Chief Executive of Dangote Group, has expressed skepticism over the possibility of Nigeria’s state-owned refineries—Port Harcourt, Warri, and Kaduna—ever becoming functional again. According to him, despite over $18 billion spent on their rehabilitation, the facilities have remained inoperative.
Speaking during a tour of the Dangote Petroleum Refinery in Lekki, Lagos, with executives from Global CEO Africa of the Lagos Business School, Dangote recalled how his previous acquisition of the government refineries in 2007 was reversed by the succeeding administration of President Umar Yar’Adua. He said political interference and poor management hindered progress.
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He explained that the refineries previously committed only about 22% of their output to Premium Motor Spirit (PMS), while his 650,000 barrels-per-day refinery now dedicates over 50% of its production to petrol.
Dangote likened the continued attempts to revive the old facilities to modernising a 40-year-old car. “Even if you change the engine, the body will not take the shock of the new technology,” he said, underscoring the impracticality of refurbishing outdated infrastructure.
His comments align with former President Olusegun Obasanjo’s past criticisms of the NNPC-operated refineries. Obasanjo previously said Shell and other international oil companies had declined his request to manage the refineries, knowing they were not viable. He revealed that Dangote and other investors paid $750 million to acquire the facilities, but the deal was later cancelled by the Yar’Adua administration.
Obasanjo added that subsequent efforts to rehabilitate the refineries were futile and wasteful, with over $2 billion allegedly squandered. He warned that the refineries would not be worth even $200 million as scrap if put on sale now.
Calls for privatisation of the government-owned facilities have intensified following their repeated shutdowns shortly after being declared operational. Industry stakeholders and analysts, including the Manufacturers Association of Nigeria, have urged the government to sell off the plants and invest in modular refineries instead.
Despite several multi-billion-dollar rehabilitation efforts, the refineries remain unproductive. In 2021, the government approved $1.4 billion for the Port Harcourt refinery, $897 million for Warri, and $586 million for Kaduna. An additional N100 billion was reportedly spent on refinery maintenance in the same year, with over $396 million used for Turnaround Maintenance between 2013 and 2017.
Efforts to reach the NNPC for comment were unsuccessful as listed contact details remained unreachable at the time of filing this report.
