By Seun Ibiyemi
The planned restart of Nigeria’s Port Harcourt and Warri refineries could fail to deliver lasting benefits unless the Federal Government guarantees steady crude oil supplies to the facilities, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has warned.
The association said the success of the refineries should no longer be measured by commissioning ceremonies or temporary production, but by their ability to operate consistently, process crude at expected capacity and generate sustainable commercial returns.
PETROAN National President, Dr. Billy Gillis-Harry, said the government and the Nigerian National Petroleum Company Limited (NNPC Ltd.) must establish clear commercial obligations before the refineries resume full operations.
He called for binding agreements containing completion timelines, throughput guarantees, minimum availability targets and financial penalties where agreed performance levels are not achieved.
The association’s position is coming against the backdrop of a significant shortfall between crude oil allocated to domestic refineries and actual deliveries.
According to data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), domestic refineries were allocated 61.9 million barrels of crude in the first quarter of 2026, but received only 28.5 million barrels.
PETROAN said the gap raises serious questions about the ability of the country’s growing refining capacity to secure adequate feedstock on a consistent and commercially viable basis.
It therefore urged the Federal Government to fully enforce the Domestic Crude Supply Obligation (DCSO) contained in the Petroleum Industry Act, while ensuring transparent crude pricing and reliable evacuation infrastructure.
The association warned that failure to resolve the feedstock challenge could leave the government with rehabilitated refineries that remain commercially unsustainable.
The proposed return of the Port Harcourt and Warri refineries would restore about 335,000 barrels per day (bpd) of refining capacity, comprising 210,000 bpd from Port Harcourt and 125,000 bpd from Warri.
PETROAN said the facilities could also play an important role in strengthening competition in the downstream sector, reducing supply risks and providing alternative sources of petroleum products when other refineries are undergoing maintenance.
The association noted that domestic refining has already significantly reduced Nigeria’s dependence on imported petrol, with petrol imports falling from N2.271 trillion in Q1 2025 to N87.4 billion in Q1 2026.
It added that domestic refineries supplied approximately 76.7 per cent of Nigeria’s petrol volumes during the first quarter of 2026.
However, PETROAN said Nigeria’s previous refinery rehabilitation efforts showed that financial investment alone could not guarantee sustainable operations.
It identified weak governance, inadequate accountability, technical capacity and poor commercial incentives as some of the challenges that must be addressed.
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The association said about $4.15 billion had been spent on interventions involving the Port Harcourt, Warri and Kaduna refineries between 1993 and 2019, while another $3.14 billion package was approved in 2021.
PETROAN therefore urged NNPC Ltd. to ensure that the proposed technical equity partnership with Chinese companies moves beyond a memorandum of understanding into an enforceable commercial agreement.
It called for independent technical due diligence, disclosure of equity and capital commitments, guaranteed crude supply, liquidated damages for non-performance and measurable throughput targets.
The association also demanded effective transfer of operating expertise to Nigerian engineers and improved infrastructure for evacuating refined products.
