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Professor emeritus of Petroleum Economics, Wumi Iledare, has issued a strong advisory against the hasty sale of Nigeria’s state-owned refineries. Speaking on the potential divestment of the Port Harcourt and Warri refineries, Iledare cautioned both the Nigerian National Petroleum Company Limited (NNPCL) and President Bola Tinubu’s administration to adopt a more deliberate and strategic approach that aligns with the country’s long-term energy security goals.
Nigeria’s dependency on imported refined petroleum products remains a persistent issue. Decades of underinvestment, inefficiencies, and corruption have rendered local refineries largely non-functional. This has resulted in recurring fuel scarcity and volatile pricing. While selling the refineries is viewed by some as a quick solution to attract investment and improve local refining capacity, Iledare argues that rushing the process may compromise national interests.
He recommends a phased and transparent privatization framework that would allow the government to maintain partial oversight. This model, according to Iledare, not only facilitates private sector participation but also strengthens regulatory accountability. Such a structure would enable the gradual rehabilitation of the refineries without exposing the country’s energy infrastructure to the risks associated with total privatization.
Iledare's position is informed by Nigeria's previous privatization efforts, notably the Power Holding Company of Nigeria (PHCN) in 2013. That transaction, which was intended to improve power supply, was plagued by procedural irregularities and widespread allegations of corruption. The outcome failed to deliver on promised reforms, triggering lawsuits and ongoing controversies.
Given this context, the urgency for caution cannot be overstated. Iledare emphasizes that the Tinubu administration and NNPCL must prioritize a clear and accountable process. Without such safeguards, the country risks repeating past mistakes that could deepen its energy crisis rather than resolve it.
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Insightful Takeaways
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Energy Security Must Drive Policy Decisions
Refinery sales should be approached with national energy stability as the central objective. -
Phased Privatization Offers Balanced Reform
A stepwise divestment allows for private investment while preserving critical state control. -
Transparency is Non-Negotiable
The entire sales process must be governed by clear, fair, and accountable procedures to prevent corruption.