Port Harcourt Refinery Rehabilitation Faces Delays Amid Economic Strain in Nigeria
Despite over two years of ongoing rehabilitation efforts, the Port Harcourt Refinery remains inactive, defying repeated pledges by the Nigerian National Petroleum Company Limited (NNPCL) to restore its operations. The prolonged absence of functional refineries has placed immense pressure on Nigeria’s economy, forcing the country to rely on costly fuel imports, which in turn has pushed more citizens into poverty.
The NNPCL had promised that the refinery would resume operations by December 31, 2023, but the current situation on the ground shows little to no signs of an imminent reopening. Recent reports indicate that Italian experts involved in the rehabilitation project arrived in Port Harcourt just days ago, with no concrete evidence that the facility will be operational by the promised deadline.
The rehabilitation project, which began over two years ago, is part of a $1.5 billion Engineering, Procurement, Construction, Installation, and Commissioning (EPCIC) contract. As of mid-December, 84.4% of the work on Area 5 of the refinery had been completed, while 77.4% of the overall project was reportedly finished, according to NNPCL Group CEO Mele Kyari. However, skepticism remains as experts have yet to complete the mechanical and flare start-up phases.
The lack of progress has raised concerns, particularly in the Nigerian Senate. Lawmakers have questioned the results of the $1.5 billion allocated for the refinery’s rehabilitation, with Senate Leader Opeyemi Bamidele leading an ad hoc committee to investigate potential economic sabotage in the petroleum sector. However, despite the urgent need for answers amid soaring fuel prices, the Senate has suspended the investigation.
As fuel costs continue to skyrocket, the economic strain on Nigerians worsens. The increase in fuel prices has led to a surge in the cost of food, goods, services, and transportation. Meanwhile, the country’s refineries, including those in Port Harcourt, Warri, and Kaduna, reportedly spent over N127 billion on wages and employee benefits between 2020 and 2021. The Port Harcourt refinery alone spent N54.57 billion over the two-year period, despite remaining non-operational.
In a recent briefing, NNPCL Chief Corporate Communications Officer Olufemi Soneye acknowledged the challenges facing the refinery but did not address its failure to become operational. Instead, he focused on NNPCL’s goal of increasing crude oil production from 1.7 million barrels per day to 3 million, which he said is achievable with the cooperation of key stakeholders.
Soneye also dismissed rumors of a rift between NNPCL and the Dangote Refinery, emphasizing that while there may be disagreements, both entities are ultimately working towards benefiting Nigerians. “There is no fight with Dangote,” he stated, insisting that their shared goal is to improve the lives of Nigerians.
As Nigeria grapples with rising fuel prices and a struggling economy, the continued delay of the Port Harcourt Refinery rehabilitation underscores the urgent need for solutions to the country’s refining challenges. Without operational refineries, the Nigerian populace remains burdened by high energy costs and inflation, leaving many to wonder when relief will finally arrive.
