Dear Readers,
Barely a month after the much-celebrated reopening of the Warri Refining and Petrochemical Company, the Refinery has come to a grinding halt.[1] Commissioned in 1978 and inactive for decades due to technical inefficiencies, the 125,000 barrels-per-day refinery resumed operations on December 30, 2024, only to shut down on January 25, 2025, due to critical faults in the Crude Distillation Unit Main Heater, which triggered safety concerns and forced operations to a standstill.
The shutdown came despite a reported $897.6 million refurbishment effort by the Nigerian National Petroleum Company Limited (NNPCL). The Warri refinery was expected to process 75,000 barrels of crude daily and reportedly began producing diesel and kerosene at 60% capacity before the abrupt closure.
Meanwhile, the Port Harcourt refinery, also heavily refurbished under a $1.5 billion rehabilitation scheme funded through an international loan, presents a more complex picture. Recommissioned in November 2024, it was publicly declared to be operating at 70% capacity. Yet actual data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority tells a different story. The facility has not exceeded 42.23% utilisation in six months, underperforming against its projected monthly target of 286 million litres. Inconsistent production, particularly of Premium Motor Spirit (PMS), has plagued the refinery.
While diesel output appears more stable and even increased in recent months, the imbalance highlights a major issue: the refinery is failing to deliver on its most critical mandate, stable PMS production to reduce import dependency and enhance energy security. What we are seeing instead is a disconnect between policy intention, technical capacity, and operational reality.
All of this is unfolding against the backdrop of bold efforts to localise Nigeria’s downstream petroleum value chain. Earlier this year, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) projected a total daily crude requirement of 770,500 barrels for domestic refineries, allocating 75,000 bpd to the Warri Refinery and 60,000 bpd to the Port Harcourt Refinery for the first half of 2025. At the same time, Afreximbank’s pledge of a $3 billion facility designed to support the purchase of locally refined petroleum products within Africa underscores a clear signal: regional demand for Nigerian output exists; however, our ability to deliver a consistent and reliable supply remains in question. (See last blog post on the Afreximbank facility)
The truth is hard to ignore: Nigeria’s state-owned refineries are not yet back; they are barely operational. Billions have been spent. Timelines have been missed. And the transparency gap between government declarations and actual performance data continues to erode public trust.
These failures offer a rare and urgent opportunity to reset the national refining agenda.
Exploring structured public-private partnerships, with clear performance benchmarks, commercial governance frameworks, and aligned incentives, may hold the key to unlocking long-term efficiency and sustainable operations of state-owned refineries. A compelling case study is the Egyptian Refining Company (ERC), which now produces approximately 4.7 million tons of refined products annually.
Will Nigeria double down on flawed infrastructure, or finally pivot toward a private-sector-led, performance-driven refining future?
[1] The refinery resumed operations on December 30, 2024, but was shut down on January 25, 2025, due to critical faults in the Crude Distillation Unit Main Heater. It has remained non-operational since the January shutdown and failed to produce any petrol, according to an April 2025 document issued by the NMDPRA.
