“Each administration promises to rejig refineries but it seems like making refineries work is a white elephant promise to make the people happy but not an actual reality in its real self”
From Jigawa to Kano, Kaduna and other states, the story is the same, fuel scarcity, long queues and increase in the price of petroleum.
Nigerians have continued lamenting inability to purchase fuel and the impact this is having on the cost of transportation and other items.
This report takes a look at Nigeria’s long battle with fuel scarcity and its seeming confusion on finding a way forward for its ever problematic refineries.
According to data by statista, Nigeria is one of the highest producers of crude oil in the world, with the most recent data of daily production put at 1.35 million barrels per day.
The organisation of petroleum exporting countries (OPEC), puts Nigeria’s daily production capacity at 1.1 million barrels per day. It also puts the country’s crude oil exports at 1.3 million barrels per day.
Despite this strength in crude oil production, the country has been unable to transform crude oil into refined petroleum, relying on foreign countries to refine petroleum and feed its large populace in a petroleum driven economy.
Nigeria owns four refineries, two in Port-Harcourt and one in Kaduna, Warri respectively.
As of September 2022, the daily petroleum consumption of the country was put at 66.8 million litres daily.
The figure was quoted to have dropped to 44 million litres daily due to subsidy removal as of October , 2023.
In 2021, the OPEC put Nigeria’s daily petroleum
Importation at 465,000 barrels per day.
Nigeria imports from countries like Netherlands, Turkey, Norway,United States, Belgium, United States, according to data from the OEC.
In 2021, the NNPC announced N100 billion to rehabilitate refineries.
Between January and July, 2022, the NNPC spent N54 billion on rehabilitating refineries.
In March 2021, the federal executive council approved $1.5 billion for the Port Harcourt refinery upgrade.
In August of the same year, $1.48 billion was approved for Warri, and Kaduna refineries upgrade.
Despite all of these, Nigeria’s refineries have failed to refine petroleum.
Data sourced from NNPC Limited showed Kaduna, Warri and Port-Harcourt refineries did not generate revenue or refine a single drop of crude oil between 2020 and 2021.
Refining companies instead of refining petroleum have become “homes of giveaways”. A report noted that Port-Harcourt refinery spent N1.54 billion on canteen and guest house in 2021.
Kaduna refinery spent N2 billion on loans to staff between 2020 and 2021.
Absence of the refineries have meant that Nigeria relies on importation of fuel, a development which puts countrymen at the mercy of what happens in the international scene.
Reports noted that Nigeria spent over N23 trillion on importing fuel in five years. The country also spends heavily on subsidies to cushion effects of importation.
Between 2005 and 2021, according to NEITI, Nigeria spent N13.7 trillion on subsidies.
Even as Nigeria says it has removed subsidies, there are still claims that the country continues to spend a lot on fuel subsidies.
Although the minister of state for petroleum, Heineken Lokpobiri, stated that by the end of 2024, refineries in the country will work, but many promises have been made in the past with no headway for refineries in the country.
While the problem with fuel importation and it’s ravaging effect continues, Nigerians have had to cough out more money for each litre of fuel and spend hours in fueling stations, banking on promises and hopes created by each administration,failing to materialize, yet.
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