Nigerians were caught off guard by the recent announcement of a deal between the Nigerian National Petroleum Company (NNPC) and African Refinery Port Harcourt Limited (ARPHL). The agreement involves the construction of a state-of-the-art, 100,000-barrel-per-day refinery, strategically located adjacent to the existing, but currently non-operational, Port Harcourt Refinery complex.
This decision has sparked public scrutiny. Many Nigerians are questioning the logic behind building a new refinery when a significant amount of money has already been poured into the rehabilitation of the existing facility, which remains idle. The original repairs on the Port Harcourt Refinery were funded in part by a hefty $1.5 billion loan, a debt Nigeria is still servicing. Despite the NNPC announcing the “mechanical completion” of the first phase in December 2023, the refinery sits unused. This unresolved situation casts a long shadow over the new project, raising concerns about transparency and planning on the part of the NNPC.
The NNPC maintains that the new refinery is a critical step towards achieving self-sufficiency in domestic fuel production. Once operational, the refinery is expected to produce a variety of in-demand products like gasoline, diesel, and liquefied petroleum gas (LPG), for both local consumption and export. The project also has the potential to create new jobs in the area. However, many Nigerians remain skeptical. They question whether the NNPC has adequately addressed the problems that plagued the previous rehabilitation project. They worry that the new project may suffer from similar mismanagement or unforeseen technical issues, leading to further delays and cost overruns.
The announcement of the new refinery coincides with a nationwide fuel shortage that has caused long queues and frustration at gas stations. Many stations in Abuja and surrounding areas have been forced to close due to what the NNPC attributes to logistical issues. This shortage underscores the urgent need for increased domestic refining capacity. However, public trust is low, with some gas stations selling fuel for exorbitant prices as high as 700 Naira per liter (almost $2 USD). The NNPC’s assurances that the logistical problems are fixed and there’s enough fuel in the country ring hollow in the face of the current situation.
While the new refinery project signifies an effort to address Nigeria’s reliance on imported fuel, several uncertainties cloud the initiative. The project’s timeline remains unclear, and the fate of the ongoing repairs at the existing Port Harcourt facility hangs in the balance. The NNPC must prioritize transparency throughout the construction process. This will be critical to regaining public trust and ensuring that this new project delivers on its promises of increased domestic fuel production and economic benefits. Nigerians are eager to see a return on investment, not only in the form of cheaper fuel prices but also in terms of job creation and economic growth. The NNPC must be clear about how the new refinery will be financed, constructed, and operated to avoid repeating the mistakes of the past.
