The Petroleum Products Retail Outlets Owners Association of Nigeria has demanded that authorities fully account for an estimated N11.35tn reportedly spent on the rehabilitation of state-owned refineries, warning that continued opacity undermines confidence in the petroleum sector and worsens the country’s energy insecurity.
In its review of Nigeria’s petroleum sector for 2025 and prospects for 2026, signed by the National President, Billy Gillis-Harry, and the spokesman, Joseph Obele, PETROAN said that despite years of heavy public spending on refinery rehabilitation, the facilities have remained largely non-functional or underperforming.
The association stated, “Over the past decade, massive public funds, reportedly around N11.35tn, have been expended on turnaround maintenance and rehabilitation of the four government-owned refineries (Port Harcourt, Warri, and Kaduna), yet the facilities largely remain non-functional or underperforming.”
PETROAN emphasised, “Transparent tracking of funds borrowed and spent must be prioritised. Full forensic audits are essential to restore confidence in public investments. Clear accountability frameworks must be enforced to prevent further waste of public resources.”
It disclosed that approved contracts included “Port Harcourt Refinery: $1.5bn, and “Warri & Kaduna Refineries: Combined $1.48bn,” noting that the scale of expenditure had heightened concerns across the downstream sector.
According to PETROAN, “These significant outlays, coupled with the enduring non-operational status of the refineries, have prompted investigations by security agencies and legislative oversight bodies into allegations of fraud, mismanagement, and lack of accountability.”
The association said transparency must be prioritised, stressing that “Transparent tracking of funds borrowed and spent must be prioritised.” It added that “Full forensic audits are essential to restore confidence in public investments,” while insisting that “Clear accountability frameworks must be enforced to prevent further waste of public resources.”
PETROAN linked the refinery failures to broader downstream challenges in 2025, including supply constraints and increased dependence on imports.
It noted that the Port Harcourt Refinery, Nigeria’s largest state-owned refining complex, “was shut down on May 24, 2025, after a short period of production, following persistent operational challenges, mechanical failures, and the inability to sustain stable commercial production after rehabilitation efforts.”
The association warned that the shutdown has continued to constrain domestic refining capacity, increasing reliance on imported petroleum products and intensifying pressure on foreign exchange demand and pump prices.
It also expressed concern over the social impact of the closure, stating that “Most worrisome is the fact that the refinery shutdown has brought hardship to members of the host communities.”
Beyond refinery challenges, PETROAN said the downstream market was destabilised by intense price competition in 2025. It stated that “the downstream sector experienced intense price competition between petroleum importers and local refiners,” adding that “this price war led to frequent pump price adjustments resulting to loses of billions of naira to our members, market uncertainty, and reduced margins for retail outlet operators.”
While acknowledging short-term consumer relief, the association said “long-term sustainability and investment confidence were negatively affected.”
PETROAN also reviewed the Naira-for-Crude policy introduced to support domestic refining, noting that “approximately 250,000 – 300,000 barrels per day of crude oil were allocated to domestic refineries under this policy.”
It said the initiative “helped ease foreign exchange demand for petroleum importers and supported local refineries with steady crude feedstock,” but added that its effectiveness was limited by operational issues.
The association observed that “Implementation gaps, delays, and inconsistencies in crude allocation affected refinery operations, while pricing disputes and supply constraints also weakened the policy’s impact.
On crude oil production, PETROAN noted a modest recovery in 2025, with output at “Approximately 1.3 – 1.5 million barrels per day, including condensates,” but stressed that production remained below Nigeria’s OPEC quota due to persistent oil theft and pipeline vandalism, aging infrastructure and operational inefficiencies, and limited upstream investment and funding constraints.
The association said “increased crude production is critical for sustaining domestic refining, improving foreign exchange inflows, and ensuring downstream supply stability.”
Looking ahead to 2026, PETROAN said improved product availability was expected but warned that affordability would depend on exchange rate stability, crude supply consistency, and regulatory balance.
The association reiterated its recommendations, including refinery privatisation, transparent crude allocation, continuous stakeholder engagement, and accountability in public investments, stating that these measures were necessary to stabilise the sector.
PETROAN concluded that Nigeria’s petroleum sector in 2025 reflected cautious recovery amid persistent structural challenges, adding that 2026 presents an opportunity to consolidate gains provided policies remain transparent, inclusive, and investor-friendly.
