President of the Dangote Group, Alhaji Aliko Dangote, has expressed strong doubts about the viability of Nigeria’s state-owned refineries in Port Harcourt, Warri, and Kaduna, which have consumed over $18 billion in turnaround maintenance without delivering results.
Speaking during a visit by members of the Global CEO Africa delegation from the Lagos Business School, Dangote shared insights into the inefficiencies plaguing Nigeria’s downstream oil sector. The business mogul, who recently launched the 650,000 barrels-per-day Dangote Petroleum Refinery in Lekki, Lagos, said the government refineries had become a monumental waste of resources.
According to Dangote, the refineries under the management of the Nigerian National Petroleum Company Limited (NNPC) have remained non-functional despite massive investments over the years.
“They’ve spent about $18 billion on the Port Harcourt, Warri, and Kaduna refineries, and they are still not working. I doubt very much if they will ever work,” Dangote said.
He drew comparisons with his own refinery, explaining that over 50% of output at the Dangote Refinery is already being dedicated to producing Premium Motor Spirit (PMS)—a much higher percentage than the 22% PMS output previously achieved by the government refineries.
Dangote further revealed that he and his team had acquired the refineries in January 2007, during the administration of President Olusegun Obasanjo, but were forced to return them just months later when President Umaru Musa Yar’Adua reversed the decision.
He explained that the decision was influenced by refinery managers who convinced Yar’Adua that the assets were sold at undervalued prices.
“The refineries were returned because the then MD of NNPC told Yar’Adua they were sold as a parting gift. The belief that they could fix the refineries led to reversing our acquisition,” he said.
Dangote likened the constant turnaround maintenance to “modernizing a 40-year-old car,” stressing that even with new engines, the outdated systems cannot support new technology.
Former President Olusegun Obasanjo, who originally approved the sale of the refineries, had earlier warned that the NNPC could not operate the refineries effectively. Obasanjo recounted how Shell Petroleum and other international oil companies refused his offer to manage the refineries, citing technical and economic infeasibility.
“I told Yar’Adua that the NNPC refineries would never work, and they won’t even sell for $200 million as scrap,” Obasanjo said.
He added that corruption within NNPC was a key reason the agency resisted privatisation, stating, “People were feeding fat on these refineries, and in a civilised society, some of them should be in jail.”
The continued non-performance of the Port Harcourt refinery (60,000 bpd), Warri refinery, and Kaduna refinery has reignited public and industry calls for full privatisation of Nigeria’s refineries.
In Q4 2024, NNPC’s former Group CEO Mele Kyari declared the Port Harcourt and Warri refineries operational. However, both were reportedly shut down again within months due to technical failures.
Industry experts and stakeholders, including the Manufacturers Association of Nigeria (MAN), have described the refineries as an economic burden. Crude refiners have advised the Federal Government to scrap and sell the facilities, using the proceeds to fund modular refineries, which are cheaper and more efficient.
Reports indicate that the Nigerian government approved $1.4 billion in 2021 for the rehabilitation of the Port Harcourt refinery, $897 million for Warri, and $586 million for Kaduna.
In the same year, ₦100 billion was allocated for refinery maintenance, with monthly spending of ₦8.33 billion. Between 2013 and 2017, over $396 million was spent on Turnaround Maintenance (TAM)—all with little or no improvement in output.
Despite these huge investments, all three state-owned refineries remain largely unproductive, with Nigeria still heavily reliant on imported refined petroleum products.
Aliko Dangote’s comments on the futility of reviving the Port Harcourt, Warri, and Kaduna refineries reinforce growing concerns about waste and inefficiency in Nigeria’s oil sector. With over $18 billion spent and nothing tangible to show, pressure is mounting on the Federal Government to either privatise or completely overhaul its approach to refinery management in Nigeria.
As the Dangote Refinery begins to stabilize and fill supply gaps, many analysts believe it may be time for Nigeria to pivot away from non-performing assets and support modern, private-sector-led refining solutions.