The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has projected a significant boost of over 850,000 barrels per day (bpd) to Nigeria's domestic refining capacity from new facilities under development. This comes as the association delivers a scathing review of the country's state-owned refineries, which remain largely non-operational despite a colossal investment of N11.35 trillion over the past decade.
Massive Investment, Zero Results: The Scandal of State Refineries
In its 2025 sector review and 2026 outlook, PETROAN highlighted a critical failure in the rehabilitation of government-owned refineries. The association revealed that N11.35 trillion has been spent on the turnaround maintenance of the Port Harcourt, Warri, and Kaduna refineries. Specific approved contracts include $1.5 billion for the Port Harcourt Refinery and $1.48 billion combined for the Warri and Kaduna refineries.
Despite this enormous financial outlay, the facilities are still not functioning properly. This situation has prompted investigations by security agencies and legislative bodies into allegations of fraud, mismanagement, and a lack of accountability. PETROAN is now demanding forensic audits and clear accountability frameworks to restore public trust in how sector investments are managed.
A New Dawn: Private Refineries Set to Transform the Market
In stark contrast to the failing state assets, the private sector is driving a refining revolution. PETROAN noted that since the Petroleum Industry Act (PIA) came into effect, over 30 refinery licences have been issued, with about 23 actively under construction. These are largely modular and medium-scale projects.
Once completed, these new refineries are projected to add over 850,000 barrels per day to Nigeria's domestic capacity. This will complement the massive Dangote Petroleum Refinery and is expected to drastically reduce the nation's reliance on imported petroleum products. The association stressed that privatisation, consistent crude supply, and regulatory reforms are key to stabilising the market.
Policy Hurdles and Persistent Challenges
The report, jointly signed by PETROAN National President, Dr Billy Gillis-Harry, and National PRO, Dr Joseph Obele, also addressed key policies. It found that the Naira-for-Crude policy had strategic potential by allocating 250,000 to 300,000 bpd to local refiners and easing forex demand. However, implementation challenges like delays, pricing disputes, and limited participation hindered its success. PETROAN called for more transparency and timely allocations in 2026.
Furthermore, the association pointed to the shutdown of the Port Harcourt Refinery on May 24, 2025, as evidence of deep-seated operational issues. This shutdown continues to constrain local capacity, increase import dependence, and put pressure on foreign exchange and pump prices. PETROAN advocates for a transparent equity partnership and a clear operational roadmap to revive the facility.
Overall, PETROAN describes 2025 as a defining year for Nigeria's downstream sector, shaped by reforms, new refinery projects, and intense competition. The outlook for 2026 hinges on learning from past failures and fully harnessing the potential of private investment.
