For over three decades, Nigeria has struggled to revive its three state-owned refineries—located in Port Harcourt, Warri, and Kaduna. Despite multiple rehabilitation efforts and billions of dollars spent, the facilities have remained idle or grossly underproductive. Recently, Aliko Dangote, President of the Dangote Group, reignited the national conversation by bluntly stating that these public assets may never operate efficiently again. Though his view may appear blunt, it reflects the hard truth: the only logical path forward is full privatization.

During a visit from members of the Global CEO Africa network on July 10, Dangote made a compelling case. While showcasing the newly constructed Dangote Petroleum Refinery, he emphasized that despite over $18 billion—some estimates say $20 billion—poured into the government refineries, they remain non-functional. “They are still not working. And I doubt very much if they ever will,” he stated.

Dangote drew a sharp analogy, comparing the effort to modernize these refineries to trying to update a 40-year-old car with new technology. “Even if you change the engine, the body won’t take the shock of that new technology engine,” he warned. His words highlight a painful truth: these facilities are outdated relics of a bygone industrial era.

NNPC’s Struggles Signal a Shift in Thinking

The Nigerian National Petroleum Company Limited (NNPC) seems to be gradually accepting reality. One day after Dangote’s remarks, NNPC Group CEO, Bayo Ojulari, told Bloomberg that the company had started reviewing its refinery strategy. He noted that restoring these abandoned and decaying refineries had become “a little bit more complicated,” adding that, “Sale is not out of the question.”

This admission marks a significant policy shift. While NNPC has clung to these refineries for decades despite their failures, it now appears willing to consider relinquishing control. This change in tone presents a critical opportunity for the Nigerian government to act decisively.

A Missed Opportunity Revisited

Back in 2007, the Obasanjo administration attempted to privatize the Port Harcourt and Kaduna refineries by selling a 51% stake for $561 million. The Bluestar Consortium paid $300 million upfront. However, in a politically motivated move, then-President Umaru Yar’Adua cancelled the sale after taking office. That decision set the country back significantly.

Ironically, the privately built Dangote Refinery—constructed at a cost similar to what Nigeria has spent on the public refineries—boasts a 650,000 barrels-per-day (bpd) capacity. This is 46% higher than the combined capacity of the three dilapidated state-owned facilities. It demonstrates what the private sector can achieve with the right vision and execution. Since Yar’Adua’s reversal, the NNPC refineries have been virtually non-functional for 17 years. Only in late 2023 did NNPC claim it had restarted operations at the old Port Harcourt refinery, but even that announcement came with doubts and no substantial output.

Why Privatization Is the Only Sensible Path

Privatizing these refineries is not merely an economic necessity—it’s a structural imperative. Under public management, these facilities have suffered from chronic inefficiency, political meddling, inflated contracts, nepotism, and widespread corruption. Transferring ownership to competent private operators will eliminate many of these problems and introduce accountability, competition, and innovation.

Privately owned refineries will benefit from modern technology, streamlined operations, and better-trained personnel. They will no longer drain the public treasury with recurring maintenance costs and capital injections that yield no results.

Even petroleum marketers who once opposed privatization are now backing the idea, recognizing that the sector’s survival depends on it. These marketers understand that a privatized refinery system will lead to better product availability, lower import dependence, and a healthier market environment.

Redirecting Resources to Priority Sectors

Selling the refineries would not only halt the financial hemorrhaging; it would also allow the government to reallocate funds to more pressing areas such as healthcare, education, and infrastructure. With Nigeria facing numerous socio-economic challenges, every naira counts. Diverting resources from unproductive refinery projects to human development will yield greater national benefits.

A Global Model Nigeria Must Embrace

Globally, many nations have already taken this route. The United States has about 125 oil refineries, all of which are privately owned. The United Kingdom, Germany, South Korea, Japan, Canada, India, Singapore, and the Netherlands operate on similar models. These countries focus on regulation and policy direction while leaving refining operations to the private sector.

Nigeria, as Africa’s largest oil producer, should not lag behind. Emulating successful global models will enable the country to maximize its natural resources while minimizing waste and inefficiency.

Boosting Investment, Jobs, and Economic Growth

Privatization will also spur domestic and foreign investment. Once in private hands, the refineries can be upgraded, expanded, and made globally competitive. This transformation will strengthen the petroleum value chain, stimulate downstream industries, and create thousands of direct and indirect jobs. It will also improve Nigeria’s balance of payments by reducing the need for fuel imports.

Moreover, a revitalized refining sector will provide the bedrock for economic diversification and industrialization, both of which are critical for long-term growth.

Conclusion: Action Must Replace Rhetoric

The debate over public refineries has dragged on for far too long. The facts are clear, and the evidence overwhelming: government ownership of refineries in Nigeria has failed. Continuing to pour money into these outdated and dysfunctional assets is no longer justifiable.

Now is the time for bold and decisive action. The Nigerian government must stop clinging to the past and embrace a future driven by private sector efficiency, innovation, and investment. Privatizing the refineries is not just the best option—it is the only viable one.