Nigeria’s oil refining sector faces deep-rooted challenges, with an overreliance on imported refined petroleum products despite being a major crude oil producer.
The country’s four refineries, with a combined capacity of 450,000 barrels per day, have been inactive for over 15 years, resulting in significant economic losses and persistent fuel shortages.
In a candid interview on News Central’s One Slot on October 15, oil and gas expert Femi Oladehin shed light on the structural, historical, and policy-driven reasons behind the country’s refining woes.
Oladehin emphasised corruption and the lack of transparency as core issues driving the crisis. He pointed out that vital industry data is often withheld from the public, leading to poor decision-making.
“The conspiracy between government officials and the private sector has led to a situation where refineries are deliberately sabotaged for the financial gain of a few,” Oladehin stated.
Nigeria has reportedly spent over $100 billion importing refined products in the last 15 years—an alarming figure for a country rich in crude oil.
Oladehin traced the current state of affairs back to the mid-1990s during General Sani Abacha’s regime when poorly executed maintenance contracts damaged the nation’s refineries.
Successive governments failed to repair this damage, further entrenching Nigeria’s reliance on fuel imports.
With the recent development of the privately-owned Dangote Refinery, which boasts a capacity of 650,000 barrels per day, Oladehin expressed cautious optimism.
He described it as a potential catalyst for positive change in the sector. However, he warned that Nigerian citizens will continue to bear the brunt of rising fuel prices in the short term, as private refiners will not offer subsidies.
In conclusion, while the Petroleum Industry Act (PIA) offers a framework for reform, Oladehin stressed the urgent need for improved security and infrastructure in the upstream sector to curb crude oil theft, which further exacerbates the industry’s challenges. He called for enhanced policies and a commitment to transparency to secure Nigeria’s energy future.