The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has praised President Bola Tinubu’s renewed push to restore Nigeria’s government-owned refineries, while calling on the Nigerian National Petroleum Company Limited (NNPC Ltd.) to back the initiative with a legally binding and performance-based agreement.
The association said the President’s position that refinery success should be judged by actual commercial output, rather than signs of activity, represents an important change in the way the country evaluates its refining assets.
PETROAN National President, Billy Gillis-Harry, said Tinubu’s recent remarks at the State House, during a meeting with the newly elected national leadership of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), provide a more practical framework for assessing whether refineries are truly functioning.
Reacting to the President’s observation that “ordinary flame and smoke of a refinery doesn’t mean it’s working”, PETROAN said the focus should now shift from symbolic restarts to measurable indicators, including production levels, operating margins, plant availability and returns on investment.
The association also welcomed Tinubu’s willingness to accept financial and contractual obligations inherited from previous administrations, describing such continuity as essential to maintaining investor confidence.
“Technical partners do not price political sentiment. They price contractual certainty and the willingness of a sovereign to own inherited commitments,” PETROAN said.
The group argued that the renewed rehabilitation effort must take lessons from previous attempts, pointing out that about $4.15 billion was committed to interventions at the Port Harcourt, Warri and Kaduna refineries between 1993 and 2019.
It added that the Federal Executive Council approved a further rehabilitation package of about $3.14 billion in 2021, comprising $1.5 billion for Port Harcourt, $897.6 million for Warri and $740.67 million for Kaduna.
According to PETROAN, the Port Harcourt refinery resumed operations briefly towards the end of 2024 but was shut again on May 24, 2025, for maintenance that was originally expected to last 30 days.
The association further cited an internal NNPC Ltd. assessment conducted in February 2026, which reportedly found that the refineries were operating at significant losses. It also noted that the National Assembly had commenced an investigation into the utilisation of funds previously allocated for refinery rehabilitation.
PETROAN maintained that the major obstacle to successful refinery rehabilitation has not simply been funding.
“The constraint was never primarily money. It was governance, technical ownership, accountability for outcomes, and the absence of any party whose commercial survival depended on the plants actually running,” it said.
The association said the need to restore the state-owned refineries has become even more important despite the expansion of private refining capacity in Nigeria.
It noted that the country’s petrol import bill dropped sharply from N2.271 trillion in the first quarter of 2025 to N87.4 billion during the corresponding period of 2026, while local refineries accounted for about 76.7 per cent of petrol supplied during the period.
However, PETROAN warned that relying heavily on a small number of domestic suppliers could expose the market to another form of supply risk.
“A market that has moved from import dependence to single-source dependence has changed the shape of its risk, not the size of it,” the association said.
PETROAN said restoring the Port Harcourt and Warri refineries to their stated capacities of 210,000 barrels per day and 125,000 barrels per day would provide an additional 335,000 barrels per day of refining capacity across different geographical locations.
According to the association, such capacity would improve the security of petroleum supplies, encourage healthier competition, support price stability and strengthen Nigeria’s bargaining position within the downstream market.
On the proposed technical equity partnership involving NNPC Ltd., Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd., PETROAN welcomed the development but urged all parties to proceed carefully.
The association noted that the memorandum of understanding signed in April 2026 is not yet legally binding and remains subject to regulatory approvals and further negotiations.
It therefore urged NNPC Ltd. to convert the arrangement into an enforceable agreement containing clear deadlines, guaranteed throughput levels, minimum plant availability requirements and financial penalties for failure to meet agreed targets.
PETROAN also called for full disclosure of the proposed equity arrangement, funding obligations, crude supply costs, offtake terms and existing liabilities.
It further demanded independent technical due diligence and the effective implementation of the Domestic Crude Supply Obligation provided for under the Petroleum Industry Act to ensure that the refineries have reliable access to crude.
“A refinery without secured crude is a stranded asset with better paperwork,” the association said.
The group also stressed that Nigerian participation in the proposed partnership must go beyond meeting employment targets.
It said genuine technology and management transfer should be a central component of the agreement to ensure that Nigerian personnel can eventually operate and manage the facilities independently.
“A partnership that does not leave behind a cadre capable of running these plants unaided has purchased a decade, not a solution,” PETROAN warned.
The association said the successful revival of the Port Harcourt and Warri refineries would have direct benefits for petroleum retailers and consumers, particularly in the South-South and South-East.
According to PETROAN, local production in the two regions would reduce transportation distances, limit exposure to freight costs and foreign-exchange fluctuations and encourage greater competition within the downstream sector.
It also pointed to the potential employment and economic benefits, saying operational refineries could serve as industrial hubs for contractors, engineers, technicians, artisans and small businesses.
PETROAN concluded that returning the Port Harcourt and Warri refineries to stable and commercially viable operations before the next general election could become one of the Tinubu administration’s most significant economic achievements.
