DMEA: Nigeria blames refineries for fuel issues

In DMEA this week, we cover Nigeria’s fuel supply and price issues as its NOC makes its first payment in the acquisition of a share in a new mega facility.

Managing director of the Nigerian National Petroleum Corp. (NNPC) Ltd Mele Kyari told the country’s House of Representatives (HoR) that issues with fuel prices and availability should be blamed on state refineries being out of operation. He noted that more than 200 illegal refineries across the country had exacerbated the situation.

NNPC operates three refining facilities on behalf of the state, with a combined capacity of 445,000 barrels per day (bpd), all of which have been out of commission since 2019. Work has been signed off to rehabilitate the two refineries that make up the 210,000 bpd Port Harcourt Refining Complex, with the 125,000 bpd Warri Refining and Petrochemical Co. and 110,000 bpd Kaduna Refining and Petrochemical Co. also to undergo major repair work thereafter.

The projects have come under intense scrutiny, with politicians casting aspersions about the Port Harcourt tender process as well as questioning investment in rehabilitating facilities that have a history of poor performance.

Meanwhile, the company has now paid the initial $1bn instalment of its $2.76bn investment in the 650,000 bpd Dangote Refinery. NNPC Ltd will acquire a 20% stake in the flagship facility, which is expected to be commissioned by the end of the year, reaching full capacity in 2023.