Industry experts, petroleum products marketers and organised labour have backed Aliko Dangote’s recent assertion that Nigeria’s state-owned refineries under the Nigerian National Petroleum Company Limited (NNPCL) may never function effectively again, despite billions spent on their rehabilitation.

The stakeholders, who spoke exclusively with LEADERSHIP, cited decades of mismanagement, outdated technology, and lack of sustainable crude supply as critical challenges, while offering practical advice on how to revive these critical assets.

Recall that Dangote, Africa’s richest man and owner of the 650,000 barrels-per-day Dangote Refinery,  that despite over $18 billion spent on maintaining the Port Harcourt, Warri, and Kaduna refineries, they remain largely non-functional.

He likened efforts to revive the facilities to “modernising a car built 40 years ago,” emphasising that even extensive maintenance could not overcome the limitations of aged infrastructure and obsolete technology.

The National secretary of the Petroleum Dealers Association of Nigeria (PEDAN), Ibrahim Yahaya, explained that the Kaduna refinery’s original design to process heavy crude from Venezuela, Libya, and Saudi Arabia requires firm, long-term crude supply contracts to operate optimally.

He noted, “Since the construction of the refinery by Chiyoda of Japan it had not undergone any major overhaul until the contract was given to TotalEnergies which could not perform the rehabilitation because they lacked technical knowledge of Chiyoda technology.” He added, “Because there is no known agreement for sustainable heavy crude supply for the Kaduna refinery, such insinuation of performance doubt could be tenable”.

On the management challenges at Warri and Port Harcourt refineries, Yahaya said, “NNPCL has been accused of being opaquely managed; they may always witness consistent shutdown”.According to Yahaya, because of the type of crude the refinery refines, it is the only refinery capable of producing bitumen.

He said that refinery operations centered on firm contracts for supply of feedstock, engineering solutions and performance and since there is no such known agreement for sustainable heavy crude supply for the Kaduna refinery such insinuation of performance doubt could be tenable.

He said that before construction of refinery crude supply sourcing should have been sorted because oil producing companies in their contract terms have identified market supply structure before embarking on field development.

‘So alteration of such contracts to suddenly divert crude to any refinery is seen as contract breach” he said.

So for Kaduna refinery to return to optimal capacity, there should be proper crude supply negotiations with countries that produce heavy crude without which its return to optimal value is doubtful, he opined.

On his part, energy expert Henry Adigun offered a more optimistic view, stating, “The NNPCL refineries can work if proper management teams with technical refinery knowledge are put in place”.

Also speaking, managing director of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, largely agreed with Dangote’s assessment, warning, “The prospects for the current refineries to operate efficiently and competitively are quite dim due to their age, outdated technology, and their ability to compete, particularly in light of the increasing domestic production we are now seeing from Dangote.”

Yusuf stated, “I largely agree with what Alhaji Aliko Dangote has said. The reality is that the prospects for the current refineries to operate efficiently and competitively are quite dim due to their age, outdated technology, and their ability to compete, particularly in light of the increasing domestic production we are now seeing from Dangote.”LEADERSHIP reports that the Kaduna Refinery and Petrochemical Company Limited (KRPC) was designed and constructed by Chiyoda Chemical Engineering & Construction Company of Japan, now known as Chiyoda Corporation.

The refinery was built to process both imported paraffinic and Nigerian crude oils into fuels and lube products. Its initial design capacity was 100,000 barrels per stream day (BPSD), later increased to 110,000 BPSD.

For Warri and Port Harcourt refineries,  he said they also require proper management and since NNPCL has been accused of being opaquely managed they may always witness consistent shutdown.

He emphasised that the outlook becomes even more pessimistic if management remains under the Nigerian National Petroleum Corporation, saying “consider how much we have spent trying to resuscitate the refineries – billions of dollars that could have been invested in building new refineries, yet we have seen no results.”

Yusuf argued that unless there is a fundamental change in the business model—potentially through privatisation or releasing the refineries from government control and bureaucracy, there is little hope for improvement.

“Otherwise, we will continue to throw good money after bad. We need to caution the new NNPC management about how much of the nation’s resources they should commit to the refineries,” he stated.

He also noted that the refinery business should ideally be managed by the private sector, allowing the government to focus more on private sector development, explaining “this can only occur if the government has a clear plan in place. Therefore, we must ensure a proper regulatory framework is established.

“The waste of government resources on these refineries is staggering. We need to close that chapter and open a new one. There are other initiatives emerging, such as the reform of the downstream sector and the Petroleum Industry Act (PIA), which have created a more favorable environment for private investment in this space.”

The Nigeria Labour Congress (NLC) expressed strong condemnation of the government and political elite over the refineries’ decay.

Head of Information and Public Affairs at the NLC, Comrade Benson Upah, said, “We are both shocked and deeply saddened by this statement. It is a tragedy of a nation whose political elite are determined to fail.”

While noting that Dangote only echoed the reality of the situation, the NLC  blamed  governments for the deliberate sabotage of public assets.

He clarified, “Our anger is not against Dangote, who by his statement seems to have seen through the treachery of those entrusted with the well-being of these refineries. It is against those who are involved from the top to the bottom that we rage against. It is a grand act of betrayal with potential karmic consequences”.

Meanwhile, the Dangote Refinery continues to set a new standard. Devakumar Edwin, Vice President at Dangote Industries, revealed, “We expect some of the long-term contracts with foreign suppliers will expire soon. Personally, and as a company, we expect that before the end of the year, we can transition 100 per cent to local crude”. The refinery currently sources 53% of its crude locally and is ramping up to full domestic supply, reducing Nigeria’s dependence on imported refined fuels.

Aliko Dangote also highlighted the refinery’s capacity to meet Nigeria’s fuel needs, stating, “As we speak right now we have more than half a billion litres. The Refinery is producing enough refined products, like gasoline, diesel, and kerosene, to meet 100 per cent of Nigeria’s requirements”.

He emphasised the refinery’s continental vision: “This refinery is not only for Nigeria; it is for Africa. We must sustain the African Continental Free Trade Area (AfCFTA) deal. We are trying to see how we trade with other African countries”.