An oil and gas consultant, Dr. Maurice Ibe, has called on the Nigerian National Petroleum Corporation Limited (NNPC Ltd.) to prioritize the revitalization of Nigeria’s four refineries to full capacity in its undertakings to expedite the country’s economic growth.
Ibe, Group Executive Chairman of Benham Group and a consultant to the Independent Petroleum Marketers Association of Nigeria (IPMAN), emphasized that the full functionality of these refineries is key to driving down fuel prices in the country.
In an interview on Saturday, December 28, 2024, Ibe opined that without an efficient and fully operational refining system, Nigerians would not experience a meaningful reduction in fuel prices.
He underscored the importance of these refineries to ensure competition within the sector, which is essential for bringing down costs at the pump.
While the Port Harcourt refinery has resumed operations, Ibe expressed grief that it is far from operating at full capacity, saying that estimated that the refinery should be producing enough to dispatch 200 trucks of 50,000 liters of fuel daily, a figure that would significantly impact fuel availability and pricing across the country.
“At full capacity, the Port Harcourt refinery should be able to dispatch at least 200 trucks daily. However, the current output is nowhere near that target, and it’s still only dispatching a handful of trucks per day,” Ibe said.
He criticized the current level of operations, noting that, despite claims from NNPC Ltd. and various dignitaries, the Port Harcourt refinery’s production remains far below expectations.
Since resuming in November 2024, it has struggled to reach even 10 trucks per day. “If it were working at even 70% capacity, we would be seeing at least 50-60 trucks loading daily,” he explained.
The expert stressed that until the government refineries reach their full operational potential, the country will continue to rely on private refineries, such as Dangote Refinery, for fuel production.
Ibe’s comments come at a time when Nigeria’s energy sector is grappling with the effects of the Petroleum Industry Act (PIA 2021), which deregulated the downstream oil sector and removed fuel subsidies.
Under the PIA, fuel prices are now determined by market forces, making it imperative for local refineries to function at optimal levels to reduce the country’s dependency on imported refined products.
“Dangote Refinery, being a private entity, will set prices based on its production costs, and Nigeria should not become overly reliant on it,” Ibe cautioned.
The consultant argued that the government refineries should be a crucial part of the strategy to lower fuel prices, especially given the deregulated environment.
He emphasized that, for the market to become more competitive and for Nigerians to see a real reduction in pump prices, the NNPC Ltd. must take decisive action to ensure that all the country’s refineries are fully operational.
He also pointed out that independent marketers, who own a larger share of the country’s retail outlets compared to the major marketers and NNPC Ltd., are critical players in the distribution chain. “Until the independent marketers start loading fuel at the new ex-depot prices, the effect on pump prices will not be felt nationwide,” he said.
Ibe’s comments reflect ongoing concerns about the performance of Nigeria’s refineries, which have historically struggled with inefficiency, underinvestment, and inadequate maintenance. Despite the long-standing promise of refinery rehabilitation, the government has faced significant challenges in revitalizing the aging infrastructure.
In addition to urging the government to ensure the full functionality of its refineries, Ibe called on the NNPC Ltd. to accelerate efforts to meet its production targets.
He noted that while the new ex-depot price of N899 per liter, a reduction from previous levels, is a step in the right direction, the full impact of this price drop will only be realized once production at the refineries reaches the required scale.
