Why NNPC’s Refineries May Never Run Again — Dangote

Aliko Dangote, President and CEO of the Dangote Group, has cast serious doubt on the future of Nigeria’s three state-owned refineries at Port Harcourt, Warri, and Kaduna. Speaking to members of the Global CEO Africa group from Lagos Business School, Dangote noted that these facilities, managed by the Nigerian National Petroleum Company Limited (NNPC), have already swallowed US $18 billion of public funds without producing a single drop of fuel.

During a tour of his mega-refinery in Lekki, Lagos, Dangote highlighted the stark contrast between his plant and the government refineries.

His facility, with a capacity of 650,000 barrels per day, now devotes over half its output to Premium Motor Spirit (petrol), while the state-run refineries can barely manage 22 percent of petrol in their product mix.

Dangote recalled his near-miss with the government refineries in 2007. He and his team had agreed to take over the three plants under President Olusegun Obasanjo, only for the deal to be undone by Obasanjo’s successor, Umaru Yar’Adua.

At the time, NNPC refinery managers assured Yar’Adua that the refineries could run under private control, but those promises proved empty.

“We bought those refineries in January 2007, but a change of government forced us to return them,” Dangote explained. “The managing director then told Yar’Adua that Obasanjo had sold them to us as a favour and that they would work perfectly. Yet, since that time, Nigeria has spent about US $18 billion on those plants, and they still won’t run. Frankly, I doubt they ever will.”

He compared the repair efforts on these ageing complexes to trying to modernise a forty-year-old car. “Even if you put a brand-new engine in an old body, the chassis can’t handle the upgrades,” he said.

Dangote’s warning echoed comments made last year by former President Obasanjo. Obasanjo revealed that international oil majors like Shell once refused to operate the plants, and he accused NNPC insiders of profiting from endless maintenance contracts.

“If anyone tells you the refineries are working, ask why they aren’t using them themselves,” Obasanjo quipped, noting that more than US $2 billion had been wasted since 2011 without any real progress.

Calls for privatisation have grown louder following the recent shutdowns of Port Harcourt and Warri refineries, both declared operational in late 2024 by then-NNPC GCEO Mele Kyari, only to halt production within months. The Manufacturers Association of Nigeria and crude-refining experts now urge the government to sell the facilities for scrap and invest the proceeds in smaller, modular refineries that can actually run.

Despite large sums earmarked for repairs,US $1.4 billion for Port Harcourt in 2021, US $897 million for Warri, and US $586 million for Kaduna,none of the refineries have come back to life. Between 2013 and 2017, nearly US $400 million went into turnaround maintenance, and Nigeria still imports most of its fuel.

Requests for comment from the NNPC went unanswered as its official lines and contacts were offline at the time of this report. With billions spent and no end in sight, both Dangote and many industry observers believe that Nigeria’s old refineries may never see production again, leaving the burden of domestic fuel supply on private ventures and imports for years to come.