The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has commended President Bola Tinubu for his commitment to reviving the country’s refineries, urging the Nigerian National Petroleum Company Limited (NNPC Ltd.) to translate the plan into a binding, milestone-driven agreement.

PETROAN said the President’s emphasis that refinery performance should be measured by commercial results rather than visible activity marked a significant shift in how Nigeria’s refining sector should be assessed.

The association said President Tinubu’s recent remarks at the State House, where he received the newly elected National Executive of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), offered a new standard for measuring refinery performance.

PETROAN National President Billy Gillis-Harry described the President’s statement that “ordinary flame and smoke of a refinery doesn’t mean it’s working” as a major development in the national conversation on refining.

According to the association, the comment moves attention away from ceremonial refinery restarts towards measurable indicators such as margins, throughput, availability and return on capital.

PETROAN also commended Tinubu for accepting the assets and liabilities inherited from previous administrations, saying continuity of obligations was essential for investor confidence.

The association said, “Technical partners do not price political sentiment. They price contractual certainty and the willingness of a sovereign to own inherited commitments.”

It said its support for a fresh approach to refinery rehabilitation was based on the record of previous interventions, noting that about $4.15 billion was allocated to interventions in the Port Harcourt, Warri and Kaduna refineries between 1993 and 2019.

It added that the Federal Executive Council approved another package of approximately $3.14 billion in 2021, comprising $1.5 billion for Port Harcourt, $897.6 million for Warri and $740.67 million for Kaduna.

PETROAN noted that the Port Harcourt refinery briefly resumed operations in late 2024 before shutting down on May 24, 2025, for maintenance initially scheduled to last 30 days.

The association said an NNPC Ltd. Internal assessment in February 2026 concluded that the plants were operating at material losses, while the National Assembly had opened an inquiry into how previous rehabilitation funds were deployed.

“The constraint was never primarily money. It was governance, technical ownership, accountability for outcomes, and the absence of any party whose commercial survival depended on the plants actually running,” the association said.

The association also argued that the strategic case for restoring the state-owned refineries had strengthened despite the rise of private refining capacity.

PETROAN said Nigeria’s petrol import bill fell from N2.271 trillion in the first quarter of 2025 to N87.4 billion in the first quarter of 2026, while domestic refineries supplied approximately 76.7 per cent of national petrol volumes during the period.

However, it warned that dependence on a limited number of domestic suppliers could create a different form of supply vulnerability.

“A market that has moved from import dependence to single-source dependence has changed the shape of its risk, not the size of it,” the association said.

PETROAN said restoring the Port Harcourt and Warri refineries to their stated capacities of 210,000 barrels per day and 125,000 barrels per day respectively would add 335,000 barrels per day of geographically distributed refining capacity.

It said the additional capacity would strengthen supply resilience, promote price discipline, improve regional balance and give Nigeria greater negotiating leverage in the downstream petroleum market.

On the proposed technical equity partnership between NNPC Ltd., Sanjiang Chemical Company Limited and Xingcheng (Fuzhou) Industrial Park Operation and Management Co. Ltd., PETROAN welcomed the initiative but urged caution.

The association noted that the memorandum of understanding signed in April 2026 remains non-binding and subject to regulatory approval and further negotiations.

It therefore called for the MoU to be converted into a binding agreement with “defined completion dates, throughput guarantees, availability thresholds and enforceable liquidated damages for non-performance”.

PETROAN also demanded transparency around the equity structure, capital commitments, crude supply pricing, offtake arrangements and accumulated liabilities.

It called for independent technical due diligence and insisted on guaranteed crude supply through effective implementation of the Domestic Crude Supply Obligation under the Petroleum Industry Act.

“A refinery without secured crude is a stranded asset with better paperwork,” the association said.

The association urged that Nigerian content in the partnership should involve genuine transfer of technical and managerial knowledge rather than simply meeting employment quotas.

It warned that “a partnership that does not leave behind a cadre capable of running these plants unaided has purchased a decade, not a solution.”

PETROAN said functioning refineries at Port Harcourt and Warri would benefit retailers and consumers by shortening supply routes to the South-South and South-East, reducing exposure to freight and foreign-exchange volatility and creating a more competitive downstream market.

The association also highlighted the potential employment impact of refinery restoration, describing the Port Harcourt and Warri corridors as industrial anchors for contractors, technicians, artisans and small businesses.

PETROAN said bringing the two refineries into sustainable operation before the next general election could rank among the administration’s most consequential economic achievements. (Channels TV)