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Aliko Dangote, President of the Dangote Group, has expressed serious doubts about the future of Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna. Despite investing approximately $18 billion in these facilities, they remain non-operational. Dangote likened the refineries’ situation to “trying to modernize a car built 40 years ago, when technology has advanced.”

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The Refineries’ History and Current State

Dangote recounted how his company acquired the refineries in January 2007 but had to return them to the government due to a change in leadership. The former managing director convinced President Yar’Adua that the refineries could work, but despite spending $18 billion, they remain idle. Dangote stated:

“The refineries that we bought before, which were owned by Nigeria, were doing about 22 per cent of PMS. We bought the refineries in January 2007. Then we had to return them to the government because there was a change of government. And the managing director at that time convinced Yar’adua that the refineries would work. They said they just gave them to us as a parting gift or so. And as of today, they have spent about $18bn on those refineries, and they are still not working. And I don’t think, and I doubt very much if they will work.”

Comparison with Dangote’s Refinery

In contrast, Dangote’s 650,000-capacity refinery has over 50% of its output dedicated to Premium Motor Spirit (petrol), compared to just 22% in government refineries. Dangote emphasized the difference in efficiency and productivity between his refinery and the state-owned ones.

Calls for Privatization

Former President Olusegun Obasanjo’s comments support Dangote’s views. Obasanjo stated that international oil companies like Shell refused to operate the refineries due to their poor condition. He also mentioned that his successor, Yar’Adua, aborted a $750m acquisition deal with Dangote and others, saying:

“I ran to him (Yar’Adua), I said, ‘You know this is not right’. He said, ‘Well, NNPC said they can do it.’ I said, ‘NNPC cannot do it,’ I told my successor that ‘the refineries, from what I heard and know, will not work and when you want to sell them, you will not get anybody to buy them at $200m as scrap’.

Financial Implications

The Federal Government has spent significant amounts on refinery rehabilitation, including:

– $1.4 billion for Port Harcourt refinery in 2021

– $897 million for Warri refinery

– $586 million for Kaduna refinery

The Role of Education in Shaping Political Views

– N100 billion spent on refinery rehabilitation in 2021, with N8.33 billion monthly expenditure

– $396.33 million spent on Turnaround Maintenance between 2013 and 2017

The Manufacturers Association of Nigeria has called for the privatization of the refineries, citing their financial burden on the country. Crude refiners also suggest selling the refineries as scrap to fund modular refineries.

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