President of the Dangote Group, Alhaji Aliko Dangote, has urged the Federal Government to halt further spending on the state-owned refineries in Port Harcourt, Warri, and Kaduna, describing the ongoing investments as a colossal waste of public funds. According to Dangote, despite consuming an estimated $18 billion, the refineries remain non-functional and may never operate effectively again.
Dangote made the remarks on Thursday, July 10, while hosting members of the Global CEO Africa group from the Lagos Business School during a tour of the Dangote Petroleum Refinery in Lekki, Lagos.
The billionaire industrialist criticized the persistent failure of the Nigerian National Petroleum Company Limited (NNPCL)-owned refineries, even after multiple turnaround maintenance efforts. In contrast, he highlighted the achievements of his 650,000-barrel-per-day refinery, which has emerged as a key player in Nigeria’s downstream oil sector. Dangote noted that over 50 percent of his refinery’s output is dedicated to the production of Premium Motor Spirit (PMS), compared to the mere 22 percent historically produced by the state-owned refineries.
Recalling his brief ownership of the refineries during former President Olusegun Obasanjo’s administration, Dangote lamented the reversal of the sale under the succeeding government of President Umar Musa Yar’Adua. He explained that the acquisition, completed in January 2007, was nullified months later after NNPC officials claimed the assets had been sold below market value.
“The refineries that we bought before were only producing about 22 percent of PMS. After the change of government, Yar’Adua was convinced by the then NNPC managing director that they could fix the refineries. We had to return them. Today, about $18 billion has been spent on those facilities, yet they still don’t work. And frankly, I doubt they ever will,” Dangote stated.
He likened the repeated maintenance efforts to upgrading a car built 40 years ago with modern technology, saying such retrofitting is often impractical: “Even if you replace the engine, the car’s frame cannot withstand the demands of a new engine. That’s the same with these outdated refineries.”
Dangote’s views align with those of former President Obasanjo, who has also publicly criticized the management and viability of Nigeria’s state-run refineries. Obasanjo had previously disclosed that Shell and other international oil firms rejected offers to manage the refineries due to their poor condition.
Obasanjo also recounted how Dangote and other investors once paid $750 million for the refineries, only for the deal to be cancelled by Yar’Adua. “I told my successor, ‘NNPC cannot run these refineries. When you want to sell them again, you won’t even find a buyer willing to pay $200 million for them as scrap.’ That’s the mess we are in,” Obasanjo remarked.
He further alleged that corruption within NNPC played a role in the facilities’ continued failure. “The NNPC knew they couldn’t do it. But they wanted to keep the system going for corrupt gains. In a sane society, those responsible should be in jail,” he asserted.
In a follow-up statement in January, Obasanjo said over $2 billion had been squandered again on the refineries since the reversal of their sale, with no improvement in output. “If Shell says the refinery won’t work, I believe them. And now, everyone is relying on Aliko. He will not only get his refinery to work but will also make it deliver,” he added.
Dangote’s refinery is expected to play a transformative role in Nigeria’s energy sector, offering a sustainable alternative to the inefficient and cash-draining state-owned facilities.
