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Nigeria’s Oil Sector Under Fire as Rehabilitated Refinery Halts Operations

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Nigeria is once again facing backlash over the state of its oil industry, following the sudden shutdown of the Port Harcourt Refinery despite a staggering $897.6 million allocated for its rehabilitation. The development has reignited public anger and raised critical questions about the management of public funds, transparency in the oil sector, and Nigeria’s chronic dependence on imported petroleum products.

A Costly Shutdown

The Port Harcourt Refinery, operated by the Nigerian National Petroleum Company Limited (NNPC Ltd.), was one of the country’s major refining facilities expected to return to operation after a long period of dormancy. In 2021, the Federal Government approved nearly $1 billion for its comprehensive turnaround, with assurances that the plant would resume phased production by 2023. However, despite multiple public claims of progress, the refinery has now ceased operations once again, with no clear explanation or restart date. The shutdown, coming after such a massive financial injection, has triggered public outrage and renewed scrutiny over how the funds were used.

Public Outrage and Calls for Investigation

The development has prompted an outcry from civil society groups, oil and gas experts, and lawmakers. Members of the National Assembly have called for immediate investigations and a forensic audit of the refinery project. Some lawmakers are demanding that NNPC Ltd., the Ministry of Petroleum Resources, and all contractors involved in the rehabilitation process provide a detailed account of how the funds were spent. “This is not just about a failed project; it’s about accountability. Nigerians deserve to know what happened to nearly a billion dollars,” one senator remarked. The refinery’s shutdown without delivery on the promised outcomes is being viewed by many as another example of government inefficiency and lack of transparency in managing key national assets.

Economic Impact and Fuel Dependence

The shutdown’s impact goes beyond infrastructure failure it directly affects Nigeria’s economy and energy security. Despite being Africa’s top crude oil producer, Nigeria continues to import nearly all its refined petroleum products due to its non-functional refineries. With fuel imports draining billions annually and the naira weakening against the dollar, the cost of imported petrol, diesel, and aviation fuel remains high, fueling inflation and public frustration. The Port Harcourt Refinery was seen as a critical piece in reducing import dependence, lowering domestic fuel costs, and supporting economic stability. Its continued failure deepens Nigeria’s vulnerability to global price shocks and supply disruptions.

The Dangote Factor

Attention is now shifting to the newly launched Dangote Refinery, a privately-owned mega project with a 650,000-barrel-per-day capacity. While it holds promise to reshape Nigeria’s downstream oil sector, the facility is still in its commissioning phase and has not yet reached full commercial output. The expectation was that the Dangote plant and refurbished government refineries would complement each other to achieve energy security. With the Port Harcourt Refinery offline, more pressure falls on the Dangote facility, raising concerns about monopolistic control and market pricing if regulatory oversight is not strengthened.

Accountability and the Path Forward

As pressure mounts, experts and stakeholders are calling for systemic reforms in Nigeria’s oil sector. Organizations like the Nigerian Extractive Industries Transparency Initiative (NEITI) are urging the government to publish detailed expenditure records, performance evaluations, and the identities of all contractors involved in the rehabilitation project. There are also renewed calls for Nigeria to consider privatizing or partially commercializing its state-owned refineries to improve efficiency and reduce political interference. For now, the Port Harcourt shutdown stands as a stark reminder of the gap between policy intentions and delivery and the urgent need for institutional accountability in the management of Nigeria’s natural resources.

 

Read Also: Burkina Faso, Mali, And Niger Forge New Trade Corridor With Morocco Amid ECOWAS Rift

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