Tinubu defies Obasanjo, bets on Port Harcourt, Warri refineries

President Bola Tinubu has rejected concerns over the viability of Nigeria’s government-owned refineries, insisting that the Port Harcourt and Warri plants will return to sustained operations despite long-running doubts over their rehabilitation.

Tinubu stated his position on Thursday when he received the Executive President of the Nigeria Union of Petroleum and Natural Gas Workers, Salimon Oladiti, and other union members at the Presidential Villa in Abuja.

The President said the government was working on a new structural and economic model for the facilities, stressing that restarting a refinery was not enough unless it could operate profitably.

“The refineries you mentioned are going to come back to work,” Tinubu said.

He added that “ordinary flame and smoke of a refinery doesn’t mean it’s working, until it’s profitable and yields the value for which it is built.”

Tinubu also said he had accepted responsibility for the assets and liabilities inherited from previous administrations and was determined to make the refineries work.

“I am not a man who looks back because I have accepted the asset and liability of my predecessor, no matter what has happened in the years past. It is my responsibility now to fix it and make it work for the largest common value of our population,” he said.

The President’s position contrasts sharply with that of former President Olusegun Obasanjo, who has repeatedly questioned the ability of the Nigerian National Petroleum Company Limited to successfully operate the state-owned refineries.

Obasanjo recently argued that public-private partnerships offered a more sustainable model for managing major government assets.

He cited the Nigeria Liquefied Natural Gas model, where private investors hold a majority stake, as an example of how public assets could be managed more efficiently.

The former president recalled that during his administration between 1999 and 2007, he approached Shell to take a 10 per cent equity stake in the refineries and operate them. When the company declined, he offered it the opportunity to manage the facilities without taking equity, but the proposal was also rejected.

According to Obasanjo, Shell cited several concerns, including the small capacity of the Nigerian refineries, poor maintenance and corruption surrounding their operations.

He also recalled that Aliko Dangote offered $750 million for a 51 per cent stake in two of the refineries during his administration, but the transaction was later reversed by the administration of the late President Umaru Musa Yar’Adua.

Obasanjo said he warned Yar’Adua at the time that the refineries could eventually be worth little more than scrap if the government failed to privatise them.

The former president also claimed that about $16 billion had subsequently been spent on attempts to rehabilitate the facilities, describing the expenditure as excessive when compared with the cost of building new refining capacity.

Dangote, who later built Africa’s largest single-train refinery, has also expressed doubts about the government’s approach to rehabilitating the old plants.

He argued that modernising decades-old facilities could create additional technical problems, likening the process to upgrading an old vehicle with a new engine while leaving its ageing body intact.

Expert rejects Tinubu’s refinery plan

Energy expert Dan Kunle has also criticised the continued investment of public funds in the state-owned refineries.

Kunle argued that Tinubu should privatise the facilities and redirect government resources towards sectors such as education, agriculture, gas infrastructure and upstream oil and gas development.

He questioned the information being presented to the President by managers of the refineries, alleging that some of the advice could be influenced by institutional self-interest.

Kunle maintained that previous administrations had repeatedly attempted to revive the plants without achieving profitable and sustainable operations.

“Because we have passed through that road before, those refineries will never work. If they ever work, they will not work at profit. They will remain problematic,” he said.

He challenged the government to build a new refinery beside one of the existing plants and operate both simultaneously, arguing that the performance and financial results would expose the weaknesses of the older facilities.

Kunle also questioned why successive administrations had failed to deliver on repeated promises to revive the refineries.

He urged Tinubu to consider privatisation and use public funds that would otherwise be committed to the plants to develop other areas of the economy.

Rivers marketers back Tinubu

While doubts persist among some stakeholders, the Port Harcourt Refinery Host Community Bulk Petroleum Retailers Association has backed Tinubu’s efforts to revive the facility.

The association said it would work towards doubling the votes Tinubu received in Rivers State in the 2023 presidential election if the Port Harcourt refinery becomes fully and sustainably operational before the 2027 general election.

The group said the refinery’s revival would have economic and political significance for Rivers State, creating jobs, supporting businesses and strengthening local economic activity.

According to the association, more than 200,000 people depend directly or indirectly on the refinery and businesses linked to its operations.

HOSCOM also expressed support for the proposed technical equity partnership between the NNPC and Chinese companies for the rehabilitation and expansion of the facility.

It urged stakeholders to ensure adequate crude supply, effective management, proper maintenance and the technical competence required to keep the refinery operating sustainably.

The competing positions highlight the major challenge facing the Tinubu administration: whether billions of naira and dollars spent over the years on Nigeria’s ageing refineries can finally translate into reliable, commercially viable domestic refining capacity.