PETROAN Pushes NNPC Refineries’ Privatisation by Q1 2026

The Petroleum Products Retail Outlets Owners Association of Nigeria has renewed calls for the privatisation of the Nigerian National Petroleum Company Limited’s refineries, urging the Federal Government to complete the process by the first quarter of 2026. The association said decisive action is needed to end decades of inefficiency, repeated rehabilitation failures and financial losses associated with the state-owned refineries.

PETROAN argued that despite huge public spending on turnaround maintenance and rehabilitation, Nigeria’s refineries have largely remained non-functional or operated far below installed capacity. According to the association, continuing to fund the refineries with public resources is no longer sustainable, especially at a time when the government is grappling with fiscal pressures and competing development priorities.

The group noted that Nigeria’s four refineries in Port Harcourt, Warri and Kaduna have consumed billions of dollars over the years without delivering consistent output. PETROAN said the outcome has been persistent dependence on imported petroleum products, exposing the country to foreign exchange volatility and supply disruptions.

According to PETROAN, privatisation would introduce efficiency, accountability and commercial discipline into refinery operations. The association argued that private investors, driven by profit and performance, are more likely to ensure proper maintenance, timely upgrades and optimal utilisation of assets compared to government ownership.

The association stressed that privatisation does not necessarily mean outright sale without safeguards. It said the government could retain minority equity stakes while transferring operational control to competent private operators with proven technical and financial capacity. This approach, PETROAN said, would protect national interests while ensuring efficiency.

PETROAN also highlighted the success of private-sector participation in other segments of the downstream petroleum industry, citing the emergence of large-scale and modular refineries across the country. According to the association, these privately owned facilities have demonstrated better project execution and operational focus compared to government-run refineries.

The group argued that the continued delay in deciding the future of NNPC refineries has created uncertainty in the downstream sector. Investors, PETROAN said, are reluctant to commit capital when policy direction remains unclear, especially regarding pricing, access to crude oil and competition with state-owned facilities.

PETROAN warned that without privatisation, the refineries could continue to drain public finances even after recent reforms in the petroleum sector. It noted that the removal of petrol subsidy has shifted the burden of inefficiency directly to consumers and taxpayers, making it imperative to eliminate wasteful spending.

The association said setting a clear timeline, such as Q1 2026, would send a strong signal of policy consistency and seriousness. It argued that a defined deadline would allow adequate time for asset valuation, due diligence, stakeholder engagement and transparent bidding processes.

PETROAN also called for transparency in the privatisation process, urging the government to ensure open and competitive bidding to avoid controversies that have characterised past asset sales. According to the association, credibility and public trust will be critical to the success of any privatisation exercise involving strategic national assets.

Labour concerns were also addressed in PETROAN’s position. The association acknowledged fears of job losses but argued that private operators are more likely to sustain long-term employment by keeping refineries operational. It urged the government to include worker protection measures, retraining programmes and fair severance arrangements in the privatisation framework.

Industry analysts have largely echoed PETROAN’s concerns, noting that Nigeria’s refining challenges are structural rather than temporary. They argue that without a fundamental change in ownership and management, the refineries may continue to underperform regardless of the amount spent on rehabilitation.

Analysts also pointed out that global best practice favours private ownership or public-private partnerships in refinery operations. In many oil-producing countries, governments focus on regulation and policy, while private firms handle operations, investment and risk management.

PETROAN said privatisation would also enhance competition in the downstream market, leading to improved supply reliability and more efficient pricing over time. With multiple private refiners operating under market conditions, the association said consumers would ultimately benefit from better service delivery.

The association further noted that NNPC Limited, now a commercial entity under the Petroleum Industry Act, should prioritise value creation rather than continue to operate loss-making assets. Divesting from refineries, PETROAN argued, would allow NNPC to focus on its core upstream and trading operations.

The call comes amid renewed public scrutiny of refinery rehabilitation projects, particularly around timelines, costs and output levels. PETROAN said privatisation would reduce political interference and allow technical decisions to drive refinery operations.

However, some stakeholders have urged caution, warning that privatisation must be carefully managed to avoid asset stripping or monopolistic outcomes. They stress the need for strong regulatory oversight to ensure fair competition and protect consumers.

PETROAN responded by emphasising the role of regulators such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority in setting standards, monitoring operations and enforcing compliance. According to the association, effective regulation is key to preventing abuse while allowing market efficiency.

As Nigeria seeks to stabilise fuel supply and attract investment into the downstream sector, the future of NNPC refineries remains a critical issue. PETROAN insists that delaying tough decisions will only prolong inefficiency and financial losses.

The association concluded that privatising the refineries by Q1 2026 would mark a turning point in Nigeria’s downstream petroleum sector. According to PETROAN, the move would demonstrate commitment to reform, reduce fiscal burdens and support the development of a competitive, efficient and sustainable refining industry.