The Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN) has called on the Nigerian government to privatize its state-owned refineries, including Warri and Kaduna facilities, in order to increase operational effectiveness, cut down on government spending, and foster competition in the downstream Petroleum industry. This was revealed in a report recently published in Abuja titled “2024 Retrospect and Outlook for 2025”. PETROAN believed that shifting these refineries ownership to private entities may transform the oil and gas industry, after decades of inefficiency, poor management, and inadequate production.
Alongside the call for refineries privatization, PETROAN urged for a strategic move toward cleaner energy alternative. It called on the government to increase the adoption of Compressed Natural Gas (CNG) by 2025, enforce local content development, prioritize Infrastructure investment, and curb the Smuggling of petroleum products. The association solicit for a ₦100 billion support to assist 10,000 firms affected by the elimination of Fuel Subsidies and the prioritizing of access to crude oil for nearby refineries. PETROAN further proposed more strategies to improve Nigeria’s energy Security and rectify the industry’s historical inefficiencies.
Govt urged to improve the use of compressed natural gas.
One key recommendation is reviewing regulatory frameworks to lower operating expenses and foster an atmosphere that attracts investment. The association also called for increased stakeholder engagement and public awareness initiatives in order to encourage the use of CNG as a competitive substitute for gasoline and diesel. It recommends leveraging computerized tracking devices to keep an eye on petroleum products as they move from refineries to retail locations. Such systems would guarantee that goods effectively reach their intended destinations, improve transparency, and reduce leaks.
Additionally, the association emphasized the importance of creating a competitive market by pushing new players to end monopolies, guarantee fair prices, and improve regulatory compliance with a strong oversight system. It also placed a strong emphasis on developing a monitoring and assessment structure in order to track downstream operators’ performance and guarantee regulatory compliance. Given the widespread problem of fuel smuggling, PETROAN suggests working with nearby nations to strengthen border security. Fortifying cross-border collaborations will stop the illicit diversion of petroleum products, which jeopardizes local supplies and government revenue.
All recommendations are aimed to boost refining capacity.
Another crucial aspect of the association’s proposal is the prioritization of crude oil allocation to local refineries, a move aimed at ensuring the Sustainability of domestic petroleum product production and reducing reliance on imported fuels. PETROAN argues that these combined measures would unlock the full potential of Nigeria’s refining sector, transforming it into a cornerstone of the nation’s economy. Overall, their recommendations are aimed to boost refining capacity, attract Private Sector investment, and improve energy security.
This Privatization call comes at a critical juncture in Nigeria’s energy industry, as the government steps up its efforts to revitalize the country’s faltering refineries. The Warri refinery has begun partial operations after over ten years of shutdowns, demonstrating the government’s dedication to bringing Nigeria’s refining capacity back online. Similarly, the 60,000 barrels-per-day (bpd) Port Harcourt refinery in the Niger Delta has also been revitalized. In a similar vein, the Nigerian National Petroleum Company Limited (NNPC Ltd.) announced that overhaul is underway for the second Port Harcourt refinery, with a capacity of 150,000 bpd, as well as the Kaduna refinery.
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Regardless of this recent progress, PETROAN contends that privatization remains the most practical way to bring about long-lasting change in Nigeria’s refining industry. The country’s refineries have been running below capacity for years due to inefficiency and poor management. Due to this, the biggest producer of crude oil in Africa is mostly dependent on imported refined petroleum products, which has resulted in high foreign exchange expenses. PETROAN believes that transferring ownership and operations to private entities would attract the capital investment, technological expertise, and operational discipline required to reverse decades of underperformance.