The Port Harcourt Refinery: Mere anticipation in a state of limbo, by Usman Yusuf Dole
Nigeria, the giant of Africa with over 234.6 million people and the 11th largest oil producer in the world, ranks 7th in crude oil production according to OPEC as of 2024. The vast oil resources of the country have proven to be both a blessing and a curse. It has been a blessing due to its role as a major economic pillar since its discovery. However, it has also been a curse, as it has opened unprecedented avenues for corruption and looting. For example, in a 2018 report, The Guardian revealed that over $60 billion was siphoned off from the oil sector between 2011 and 2014 alone.
Petrol plays a crucial role in Nigeria’s daily activities, with the country’s consumption estimated at 72.07 million liters in 2021. However, by mid-2024, this figure dropped to around 50 million liters due to the effects of the subsidy removal, according to data from the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing Regulatory Agency (PPPRA).
During the subsidy regime, the Nigerian government spent billions of naira on fuel subsidies. For instance, about N4 trillion was allocated to fuel subsidies. However, the massive corruption linked to the subsidy system revealed the true intentions of Nigerian politicians, leading to President Tinubu’s decision to end the subsidy regime. In his inaugural speech, he declared: “Subsidy is gone.”
READ ALSO: Port Harcourt refinery petrol price surpasses Dangote’s by ₦75/litre -Marketers
This announcement plunged Nigeria into an economic quagmire. Before the speech, the price of petrol was around N185 to N195 per liter. However, since the subsidy removal, the price has soared to around N1,080 to N1,100 per liter.
The Port Harcourt refinery, meanwhile, remains little more than a mere anticipation. If a single individual, like Aliko Dangote, can establish a refinery, one must ask: why can’t Nigeria do the same? The refinery remains in a state of limbo, primarily due to pervasive corruption and mismanagement within the oil industry. When Dangote’s refinery was on the verge of completion, many Nigerians saw hope. They believed that the development of a domestic refinery, especially with the potential abolition of the dollar in the supply chain between Dangote’s refinery and the federal government, would bring much-needed change. However, despite these expectations, the ongoing drama of soaring fuel prices continues.
On November 26, 2023, Presidential Media Aide Bayo Onanuga announced the revival of the Port Harcourt refinery, along with a directive from the President for the NNPC to begin reactivating the Warri and Kaduna refineries. It was stated that product loading would officially commence on November 26, 2024. While this announcement was seen as a significant step for Nigerians, its full impact remains uncertain, especially given the ongoing issue of frequent fuel price hikes.
As clarified by NNPCL, the Port Harcourt refinery is currently operating at 70% of its installed capacity, with plans to increase production to 90%. The expected outputs include 1.4 million liters of straight-run gas blended into PMS, 900,000 liters of kerosene, 1.5 million liters of diesel, 2.1 million liters of low pour fuel oil, and an undisclosed amount of liquefied petroleum gas.
If the refinery operates as expected, Nigerians are anticipating the following developments:
1. Job Creation: The operation of the Port Harcourt refinery will generate both direct and indirect employment opportunities for Nigeria’s growing youth population. Jobs will be created at the refinery itself and across the various industries in the supply chain.
2. Revenue Generation: As previously mentioned, crude oil is a major source of Nigeria’s revenue. The refinery’s operations will significantly boost the country’s domestic petroleum supply, leading to an unprecedented increase in revenue generation.
3. Reduction in Petroleum Product Prices: With the commencement of operations at the Port Harcourt refinery and the recent announcement of a N20 reduction in PMS by Dangote Refinery, there is high expectation that domestic refining of Nigeria’s crude oil will lead to a reduction in petroleum product prices nationwide.
4. Industrialisation: The launch of the Port Harcourt refinery is expected to spur industrial growth within the oil sector. This will include the expansion of upstream, midstream, downstream, oil and gas, and retail industries, all of which will see increased operations and investment.
5. Infrastructural Development: The establishment of a refinery will act as a catalyst for broader infrastructural development, enhancing the refinery’s operational efficiency and improving the economic landscape of the surrounding regions.
Stand still: Despite these expectations, the revival of the Port Harcourt refinery remains, for now, a mere anticipation—a state of limbo—unless proven otherwise!
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