Minister Of State For Petroleum Resources Advocates NNPC Investment In Regional Refineries

Heineken Lokpobiri, the Minister of State for Petroleum Resources, has made a crucial recommendation for the Nigerian National Petroleum Company Limited (NNPC) to invest in regional refineries. This advisory comes at a time when the government is seeking effective solutions for the management of the country's oil production and refining. By shifting focus from operating government-owned refineries to investing in private ones, the government aims to enhance operational efficiency and profitability.

During the inaugural meeting of the Crude Oil Refineries Owners Association of Nigeria, held in Lagos on October 8, 2024, Minister Lokpobiri emphasized the need for the NNPC to acquire shares in both planned and existing private refineries. This strategy is expected to provide the national oil company with a more sustainable and profitable model for involvement in the refining sector. Instead of managing state-owned refineries, the NNPC could leverage its resources and expertise to support private enterprises that are already operational or in the pipeline.

Furthermore, this shift aligns with the federal government's broader objectives of revitalizing Nigeria's oil sector. After reducing its stake in the Dangote refinery from 20% to 7.2%, the NNPC is now exploring innovative models to ensure that the country's refining capacity meets domestic demands. The government is hopeful that by empowering private refineries, it can significantly boost local production and reduce dependence on imported fuels.

In recent discussions, Lokpobiri highlighted that despite the government's significant investment, the state-owned refineries have failed to resume operations effectively. The NNPC has previously assured the public multiple times about the Port Harcourt refinery's impending production, but as of the latest updates, there have been no tangible results. The minister's call for a new operational model aims to address these persistent challenges and bring about a much-needed transformation in Nigeria's refining landscape.

As part of this transformation, the government has initiated plans to auction the operations of the four government refineries to private sectors. This move is intended to ensure that these facilities can be run more efficiently, thus enhancing their output and reducing costs associated with inefficiencies in management. The ultimate goal is to create a thriving refining industry that meets Nigeria's energy needs and fosters economic growth.

The end of NNPC's exclusive agreement to purchase petrol from Dangote Refinery marks another significant change. This new policy allows independent marketers to negotiate their prices and procure fuel directly from the refinery, potentially leading to more competitive pricing in the market.

In conclusion, the recommendations by Minister Lokpobiri open up new avenues for the NNPC to engage with the private sector, signaling a shift towards a more collaborative approach in managing Nigeria's petroleum resources. By investing in regional refineries and promoting private ownership, the government hopes to ensure the sustainability and growth of the nation's oil sector.