Dangote Questions Viability Of NNPC Refineries After 18 Billion Dollars Repairs

Aliko Dangote has raised serious doubts about the future of Nigeria’s state-owned refineries despite over $18 billion reportedly spent on repairs.

Speaking during a visit by the Global CEO Africa group from Lagos Business School to his Lekki refinery, Dangote questioned whether the Port Harcourt, Warri, and Kaduna facilities under the Nigerian National Petroleum Company (NNPC) Limited would ever function properly again.

The billionaire industrialist, whose privately built refinery recently began operations, reflected on past efforts by his company to buy the state refineries in 2007. He explained that although the deal was initially approved, it was reversed under late President Umaru Musa Yar’Adua’s administration, which believed the plants could be revived under government control. Dangote said that decision led to years of wasteful spending with no results.

He pointed out that more than half of his own refinery’s output is already dedicated to petrol, in contrast to the low petrol yield of the government-owned refineries. According to him, the federal refineries were producing just 22 percent petrol when his company was involved. After the takeover was reversed, successive administrations poured billions into maintenance without restoring full functionality.

Comparing the process to trying to modernize an old car, Dangote said updating decades-old refinery technology is a losing battle. He argued that even with engine replacements, the structural limitations of the plants make them ill-suited to handle modern systems, making their full recovery unlikely.

While the NNPC announced that the Port Harcourt refinery began crude oil processing in November 2023, operations were again halted in May 2024 for further maintenance. The Warri and Kaduna refineries are still undergoing various stages of rehabilitation.

In March 2021, the federal government approved $1.5 billion for Port Harcourt’s overhaul. Later that year, an additional $1.48 billion was approved for the Warri and Kaduna refineries. The projects were expected to be completed in phases stretching over nearly three years, but none of the facilities have returned to consistent operation.

The frustration with the slow progress has sparked internal discussions at NNPC. Bayo Ojulari, the company’s Group Chief Executive Officer, said the firm is now weighing the option of selling the refineries altogether, citing the growing complexity and cost of rehabilitation.

Dangote’s comments come at a time when his own refinery is being hailed as a major step toward energy independence in Nigeria. With a refining capacity of 650,000 barrels per day, the Lekki plant is expected to reduce Nigeria’s dependence on imported fuel, potentially reshaping the country’s oil sector.

For now, the contrast between Dangote’s private success and the government’s troubled efforts has reignited debate over Nigeria’s management of its critical infrastructure. As the federal government continues to pump resources into aging assets, questions remain about whether the money would be better spent elsewhere—or whether it’s time to let go of a failing model entirely.