Education
PETROAN urges NNPC to turn refinery revival commitment into binding action – EnviroNews
– Advertisement –
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has commended President Bola Ahmed Tinubu for his renewed commitment to the revival of Nigeria’s refineries, while urging the Nigerian National Petroleum Company Limited (NNPC Ltd) to translate the commitment into a binding, milestone-driven execution plan.
In a statement issued on Monday, August 17, 2026, PETROAN said the President’s recent assertion that a refinery showing “ordinary flame and smoke” does not necessarily mean it is working represents an important shift in how Nigeria should assess refinery rehabilitation.
According to the association, the focus must now move beyond ceremonial restarts to measurable indicators including commercial viability, throughput, plant availability, operating margins and returns on investment.
PETROAN’s National President, Dr. Billy Gillis-Harry, also welcomed President Tinubu’s position that the administration would accept the assets and liabilities inherited from previous governments without resorting to blame.
The association said such institutional continuity was essential to restoring investor confidence, arguing that technical and financial partners require contractual certainty and confidence that government will honour inherited obligations.
$4.15bn spent between 1993 and 2019
PETROAN said the need for a fundamental reset in the management of Nigeria’s refineries was justified by the country’s long history of spending on rehabilitation without achieving sustained operations.
It noted that about $4.15 billion was allocated between 1993 and 2019 for interventions in the Port Harcourt, Warri and Kaduna refineries.
It further recalled that the Federal Executive Council approved another rehabilitation package of approximately $3.14 billion in March 2021, comprising $1.5 billion for the Port Harcourt Refining Company, $897.6 million for the Warri Refining and Petrochemical Company and $740.67 million for the Kaduna refinery.
According to PETROAN, parliamentary and union sources have also put operating and rehabilitation expenditure between 2020 and 2025 at about N11.35 trillion, alongside substantial foreign-currency components.
The association observed that the Port Harcourt refinery briefly resumed operations in late 2024 before shutting down on May 24, 2025, for maintenance initially scheduled to last 30 days. It said the facility had yet to return to operation at the time of the statement.
PETROAN added that an internal NNPC Ltd assessment in February 2026 found the refineries to be operating at material losses.
The association expressed support for the National Assembly’s ongoing inquiry into the deployment of funds for refinery rehabilitation, saying the exercise should help establish accountability and provide the basis for future capital discipline.
“Capital discipline is retrospective before it is prospective,” PETROAN stated, maintaining that the fundamental problem had not been a lack of money but weaknesses in governance, technical ownership and accountability for outcomes.
PETROAN warns against single-source fuel dependence
While acknowledging the dramatic decline in Nigeria’s petrol import bill and the increasing contribution of domestic refineries, PETROAN cautioned against assuming that the country’s refining challenge had been completely resolved by private-sector investments.
The association noted that petrol imports fell from N2.271 trillion in the first quarter of 2025 to N87.4 billion in the first quarter of 2026, representing a decline of about 96 per cent.
It also said domestic refineries supplied approximately 76.7 per cent of national petrol volumes during the first quarter of 2026, compared with 45.2 per cent a year earlier.
PETROAN argued, however, that a market that has moved from import dependence to dependence on a single major domestic source has merely changed the nature of its vulnerability.
According to the association, refinery maintenance, unplanned outages, marine logistics disruptions and other operational challenges make plurality of supply essential for national energy security.
PETROAN said restoring the Port Harcourt refinery’s 210,000 barrels-per-day capacity and Warri’s 125,000 barrels-per-day capacity would add 335,000 barrels per day of geographically distributed refining capacity to the national system.
It said the strategic value of the two facilities now goes beyond import substitution to include supply resilience, price discipline, regional balance and stronger negotiating leverage in the downstream market.
Association backs NNPC-Sanjiang technical partnership
PETROAN also welcomed the Memorandum of Understanding executed in Jiaxing City, China, on April 30, 2026, between NNPC Ltd, Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd.
The proposed Technical Equity Partnership covers completion, operation and maintenance of the refineries, petrochemical expansion and co-located gas-based industrial development.
The association said the equity structure could better align the interests of the technical partner with the long-term performance of the refineries because a partner with a stake in the margins would have a greater incentive to ensure sustained operations.
However, PETROAN stressed that the MoU remains non-binding and subject to regulatory approval and further negotiations.
It therefore urged NNPC Ltd and other stakeholders to make several conditions precedent to what it described as “public celebration” of the partnership.
These include converting the MoU into a binding agreement with clear completion dates, throughput guarantees, availability thresholds and enforceable penalties for non-performance.
The association also called for disclosure, to the extent permitted by law, of the equity structure, capital commitments, offtake arrangements, crude supply pricing and treatment of accumulated liabilities.
It further demanded independent technical due diligence, including verification of the residual value and remaining useful life of existing refinery units.
Secured crude supply critical to refinery survival
PETROAN identified reliable feedstock supply as another critical condition for the success of the refinery revival programme.
It called for firm implementation of the Domestic Crude Supply Obligation under the Petroleum Industry Act, with transparent pricing and dependable evacuation infrastructure.
The association warned that without guaranteed access to crude, a refinery could remain a stranded asset regardless of the amount invested in rehabilitation.
It also called for meaningful Nigerian content through the transfer of technical and operational knowledge to Nigerian engineers and managers, rather than relying primarily on employment headcount targets.
According to PETROAN, a successful partnership must ultimately build sufficient Nigerian institutional and technical capacity to operate the refineries independently.
The association equally stressed the need to strengthen product evacuation and distribution infrastructure, including pipeline security and depot rehabilitation, while ensuring equitable access to domestically produced products for independent retailers.
Retailers seek competitive downstream market
PETROAN said its interest in refinery revival stems directly from the realities faced by petroleum product retailers, who bear working-capital risks arising from price fluctuations and supply disruptions.
The association said its members employ, directly and indirectly, hundreds of thousands of Nigerians across filling stations, haulage, maintenance, security and related activities.
It argued that functioning refineries in Port Harcourt and Warri would shorten supply routes to the South-South and South-East, reduce exposure to freight and foreign-exchange volatility, improve margin predictability and foster a more competitive downstream market.
PETROAN further described the two refinery corridors as important economic anchors whose revival could restore jobs and business opportunities for contractors, technicians, artisans and small enterprises that have been affected by the decline of refining activity.
PETROAN sets election-year benchmark
The association said bringing the Port Harcourt and Warri refineries into sustainable operation before the next general election would constitute one of the administration’s most significant economic achievements.
However, PETROAN cautioned that an electoral timetable should not override engineering requirements, safety standards or commissioning integrity.
Rather, it said the political calendar could provide a public benchmark against which delivery would be assessed.
“Delivery, not announcement, is the currency,” the association stated, adding that “a refinery that runs is its own argument.”
PETROAN also commended NUPENG National Executive President, Comrade (Dr.) Salimon Akanni Oladiti, and the union’s leadership for keeping refinery revival on the national agenda.
The association expressed support for NUPENG’s call for an end to the casualisation of workers in the upstream sector, stressing that decent and secure employment was part of, rather than separate from, energy security.
PETROAN, under the leadership of Dr. Billy Gillis-Harry, reaffirmed its readiness to work with the Federal Ministry of Petroleum Resources, NNPC Ltd, the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the National Assembly to establish a framework capable of translating the presidential commitment into functioning refineries, verifiable production and greater value retention within Nigeria.
The association concluded that Nigeria possesses the crude resources, technical personnel and domestic market required to sustain refining, adding that the critical missing ingredient is now “execution discipline.”
