Nigeria wants to fix its refineries – again

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Nigeria’s national oil company has said refurbishment work on its three state-owned oil refineries – currently operating well below their installed capacity of 445,000 barrels per day – is due to start in January 2020.

The aim is to have them running at full capacity by 2022, part of government plans to end Nigeria’s reliance on fuel imports, despite being Africa’s biggest crude oil producer. This costs the country billions each year, contributing to rampant smuggling and regular fuel shortages.

It’s an unsustainable drain on already stretched public finances, and a constraint on economic growth. Fixing the problem is overdue, but plans like this aren’t new. Successive governments have promised, and failed to tackle the issue.

Could this time be different? Maybe.

The newly appointed head of the notoriously opaque Nigerian National Petroleum Corporation (NNPC) has pledged more transparency. Given the country’s poor record on oil sector reform few will get excited about this, but the government isn’t going it alone.

There are efforts to involve the private sector, including plans for dozens of small, modular refineries. Then there’s a giant refinery being built by billionaire Aliko Dangote which, at full capacity (650,000 barrels per day), could single-handedly meet domestic demand.

It will take longer than advertised, but some change in circumstances may be on the horizon.

This report reflects the views of the author alone, not those of How we made it in Africa.


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