President Tinubu’s directive that the refineries be run as profitable ventures must be adhered to, writes SOLA ADEMORITAN
For decades, Nigeria’s refineries have stood as perhaps the most frustrating symbol of the country’s paradox: a nation endowed with abundant crude oil but repeatedly compelled to spend scarce foreign exchange importing refined petroleum products.
Against that history of disappointment, President Bola Ahmed Tinubu’s latest declaration that Nigeria’s refineries must return to work, and, more importantly, become profitable represents an audacious shift in the way the government is approaching the country’s troubled downstream petroleum sector. Tinubu’s message is notable because he is not merely promising to restart the refineries. He is insisting that they must deliver commercial value.
Receiving the national leadership of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) at the State House in Abuja, the President said the federal government was undertaking a comprehensive reset, restructuring and technical assessment of the refineries to address the structural, operational, financial and managerial problems that have repeatedly undermined their performance.
Nigeria has seen refineries “revived” before, at least on paper. Billions of dollars have been committed to rehabilitation projects over the years, yet sustained productive operation has remained elusive. Tinubu is therefore confronting a problem that is not simply technical but institutional and commercial.
His assertion that the mere presence of “flame and smoke” from a refinery does not mean that it is working unless it is profitable goes to the heart of the matter.
A refinery is not successful because its machines turn on. It is successful when it reliably processes crude, produces refined products at commercially viable costs, competes effectively, reduces dependence on imports and generates value for its owners, the Nigerian people. That is the audacious part of the President’s proposition.
Nigeria’s petroleum story has historically been characterised by an uncomfortable contradiction. The country produces crude oil on a significant scale, yet its domestic refining capacity has frequently failed to meet national demand.
The result has been a costly dependence on imported refined products, exposing the economy to international price movements, foreign exchange pressures and supply disruptions.
Tinubu’s administration has already taken one of the most consequential steps in this area with the removal of the petrol subsidy. NUPENG President Salimon Akanni Oladiti, while meeting the President, described the decision as courageous and said it had helped halt what he characterised as decades of financial drain on national resources.
But subsidy removal creates its own obligation: the government must ensure that the structural savings and reforms ultimately translate into a more efficient energy economy. That is where domestic refining becomes crucial.
Functional refineries can strengthen energy security, reduce import dependence and create opportunities across the petroleum value chain. They can also generate employment and stimulate supporting industries, from logistics and engineering to maintenance, transportation and manufacturing.
For the workers represented by NUPENG, this is not simply a matter of national economic theory. It affects their daily livelihoods.
Oladiti’s comments are instructive. He linked improved roads to the welfare of tanker drivers, noting that safer highways mean fewer accidents, fewer spillages and reduced stress for workers transporting petroleum products across the country.
The same logic applies to refining. A more efficient domestic refining system can fundamentally alter the operating environment for petroleum workers and businesses. Yet the President’s declaration should also be judged against Nigeria’s long history of ambitious announcements concerning refineries.
The most important question is not whether the refineries will restart. It is whether they can remain operational. That requires answers to difficult questions about crude supply, maintenance, management, financing, technical competence, operational efficiency, security and commercial governance.
It also requires a business model capable of surviving beyond political cycles. This is why Tinubu’s emphasis on research, technical assessment, effective management and profitability is particularly significant. It suggests an attempt to move away from the traditional approach of spending money on infrastructure without sufficiently addressing the institutional weaknesses that prevented the infrastructure from delivering sustainable value.
When the federal government succeeds in creating a refinery system that is commercially disciplined, technically competent and independently accountable for performance, the implications could be substantial.
Nigeria would not merely be repairing old plants. It would be rebuilding an important pillar of its energy economy. Another striking element of Tinubu’s intervention was his willingness to accept responsibility for the condition of the refineries.
The President said he had inherited both the assets and liabilities of his predecessor and that, irrespective of what had happened in previous years, it was now his responsibility to fix the problem. That posture is politically significant.
Governments can easily attribute failed projects to previous administrations. But citizens ultimately judge the government in office by what it does with the problems it inherits. Tinubu’s argument is essentially that history may explain the problem, but it cannot be used indefinitely as an excuse for failing to solve it.
The removal of fuel subsidy, renewed infrastructure spending, the emphasis on CNG and the effort to restructure the petroleum sector all point towards an attempt to alter the architecture of Nigeria’s economy rather than merely manage its symptoms.
The challenge, of course, is ensuring that reforms translate into tangible improvements in citizens’ lives.
Perhaps one of the more interesting political dimensions of the meeting was NUPENG’s acknowledgement of some of the administration’s reforms.
Organised labour has historically been among the strongest critics of policies that increase living costs or affect workers’ welfare. That makes NUPENG’s recognition of the subsidy reform and infrastructure programme particularly noteworthy.
Ultimately, the refinery question is bigger than petroleum. It is about whether Nigeria can move from a culture of consuming its resources to one of creating sustainable value from them.
The President’s ambition is therefore considerable. He is attempting to make Nigeria’s petroleum infrastructure work within a new economic framework, one in which public assets are expected to generate measurable value rather than perpetually consume public resources.
His insistence that refineries must be profitable is perhaps the most important part of the declaration.
Nigeria cannot afford another cycle in which billions are spent rehabilitating facilities only for them to return to prolonged inactivity. Nor can the country afford to measure success by ceremonial commissioning, temporary production or political announcements.
The standard must be much higher: reliable production, commercial viability, transparency, accountability and measurable value to Nigerians.
The road to that destination is obviously not easy. But with the resolved determination of President Tinubu administration, the goal will be achieved.
Ademoritan writes from Lagos State