Nigeria spent more than $10 billion in a decade on three oil refineries that produced almost no fuel, according to a parliamentary report.
It cost the state-owned Nigeria National Petroleum Co. 4.8 trillion naira ($10.3 billion) to run the facilities from 2010 to 2020, even though they were operating well below their combined capacity of 445,000 barrels of crude per day, according to a report by a committee in the country’s House of Representatives. The company is currently rehabilitating the plants.
By the time they were rehabilitated, they had almost ceased operations and production had not exceeded 30% since 2010, according to the report. This made Nigeria completely dependent on gasoline imports, the price of which was kept artificially low by fuel subsidies.
The decades-old subsidy regime was scrapped by newly sworn-in President Bola Tinubu last week and the government has been working to address refining challenges to moderate fuel prices.
A giant 650,000-barrel-per-day facility built by Africa’s richest person, Aliko Dangote, opened last month, but it is unclear when it will be able to supply a significant amount of refined fuel to the domestic market.
The NNPC is also rehabilitating its 210,000 bpd complex in Port Harcourt and a smaller plant in Warri through contracts worth more than $2 billion with Italy’s Maire Tecnimont SpA and Korea’s Daewoo Engineering & Construction Co. Ltd., respectively. Both sites are expected to resume operations before the end of 2023, according to the report that the lower house of the Nigerian Parliament approved on Tuesday.
The report advised the NNPC to consider outsourcing the management of the repaired refineries to “reputable” international companies. An NNPC spokesman did not immediately respond to a request for comment.
