Buhari leaving without fixing refineries as Dangote Refinery opens

President Muhammadu Buhari has commissioned the 650,000 barrels a day (b/d) Dangote Refinery in Lagos at an event attended by politicians and business leaders.

With the president having just a week to complete his eight-year term, he is leaving without fulfilling a key promise of his campaign: putting the country’s state-owned refineries back to use and ending the payment of fuel subsidy.

Nigeria, for the most part Africa’s largest oil producer, has relied on the importation of refined fuel for its domestic needs, paying trillions of naira yearly to subsidise imported petrol.

– Promise not kept

As presidential election candidate, Mr Buhari, a former petroleum minister, dismissed subsidy payments as “fraud” and vowed to make the refineries work. The 210 b/d Port Harcourt, 125,000b/d Warri and the 110,000 b/d Kaduna plants operated at under a fifth of their combined capacity years before he came to office.

The government closed the three refineries between 2019 and 2020 and awarded the Italian engineering firm Maire Tecnimont a $1.5 billion contract for the rehabilitation work at the Port Harcourt plant in April 2021.

The firm said the first phase of the work would be completed in 24 months, with the second and third phases taking 32 and 44 months. The petroleum ministry said the refinery will start producing by December 2022.

The government also awarded a $1.48 billion contract for the repairs of the Warri and Kaduna refineries in August 2021, with President Buhari saying last year the Warri refinery would deliver fuel before the first half of 2023.

The contractor, Saipem Limited, said the three phases of the repairs will be completed in 21, 23 and 33 months.

– Missed deadlines

All the deadlines have so far failed. The first phase of the Port Harcourt rehabilitation project missed its scheduled completion date last month and may not be finished for another four months at least, according to the UK-based Ergus Media, quoting an oil ministry source.

The September date may be ambitious still, the organization, which provides price information, market data and business intelligence for the global energy industry, reported.

Instead, a quick-fix programme at the Warri refinery, scheduled to finish by November, could be completed first. The state-owned Nigerian National Petroleum Corporation signed a $740.7 million maintenance contract in February with South Korea’s Daewoo for a quick-fix repair of the Kaduna refinery, to restore the plant to at least 60% its capacity by the fourth quarter of 2024.

– Dangote Refinery

At the commissioning of the Dangote refinery Monday, Aliko Dangote said his refinery will produce its first fuel by June. He had earlier said the refinery will start commercial operations 8-12 months after commissioning.

The government, through the state-owned NNPC, holds a 20% stake in the refinery.

President Buhari commissioned the massive project at about 2 pm.