Nigeria’s state refinery reopens as fuel price soars

LAGOS: Nigeria’s national oil company began operating a refurbished oil refinery on Tuesday, after failing to meet seven previous deadlines.

The Nigerian National Petroleum Corporation Limited (NNPCL) said in a statement that the plant in Port Harcourt -- one of four closed for repairs -- is ready to dispatch its first batch of products to depots.

Port Harcourt is the hub of Nigeria’s oil industry, which has long been one of Africa’s top exporters of crude while struggling to provide refined fuel to domestic users.Last year, shortly after his election, President Bola Tinubu abolished a fuel subsidy, sending price soaring and triggering protests.

The refinery’s rehabilitation is the fruit of a $1.5 billion agreement signed in 2021.Mele Kyari, the group managing director of the NNPCL, led a tour of the plant and staff presented samples of petrol, kerosene and diesel to regulators.

In a statement celebrating the development, Tinubu thanked the African Export-Import Bank for financing the project.“With the successful revival of the Port Harcourt refinery, President Tinubu urges NNPC Limited to expedite the scheduled reactivation of both the second Port Harcourt refinery and the Warri and Kaduna refineries,” said a statement signed by Bayo Onanuga, a presidential adviser.

The refineries have been a contentious topic in Nigeria ever since funds were earmarked for the turnaround of the facilities.The four national refineries were shut down by the NNPCL in 2020. At the time, Kyari said it was no longer sustainable to operate the refineries due to aged pipelines and thievery by pipeline vandals.

Adewale Dosunmu, a professor of petroleum engineering at the University of Port Harcourt, told AFP the refinery will cause a ripple effect within the economy.This, he said, includes the development of local technical talent and a steady supply of petroleum products.

“In any refinery, there are a lot of downstream activities that follow, apart from supplying refined products. By-products from the refining process will be readily available as business opportunities for other small businesses,” he said.

It is the second refinery to begin operation in Nigeria in recent months -- the other being the Dangote Refinery owned privately by Aliko Dangote, ranked by Forbes as Africa’s richest man.Local refining is expected to reduce reliance on imported petrol to meet Nigeria’s 50 million-litre daily demand, and eventually lower prices.