Yemisi Izuora
The return of operations of the Kaduna refinery will further insulate Nigeria’s economy from international crude prices volatility, says the regulatory Agency.
Already, the refinery’s rehabilitation has reacted 81.1 per cent completion according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The Authority’s Chief Executive Officer, Farouk Ahmed, who gave the update emphasised that the refinery’s upgrade is not solely about reducing Nigeria’s dependence on imported fuel but also about insulating the country’s economy from the volatility of international crude oil prices.
“Kaduna Refinery’s overall progress is 81.1 per cent and we have broken it down into work packages. One thing that is peculiar about Kaduna Refinery is that even if the refinery reaches 100 per cent completion, we also have to consider the state of the pipeline.
So, obviously, that is another major project,” he stated.
The CEO highlighted that the refinery’s rehabilitation aligns with the NMDPRA’s strategic goal to strengthen domestic refining capacity. This move is considered essential for establishing long-term energy security and sustainability within the country.
Ahmed reiterated the Authority’s continued support for both modular and large-scale refinery projects across Nigeria, including those under private ownership.
Among the various national assets under restoration, the Kaduna Refinery is one of several major projects, alongside the Warri and Port Harcourt refineries. Ahmed also referenced private sector efforts, such as the Dangote Refinery, which has begun ramping up its production capabilities.
He further underscored the broader economic benefits of increasing domestic refining. By reducing reliance on imported petroleum products, Nigeria can shield itself from global oil price fluctuations driven by geopolitical events and foreign policies, particularly from influential nations such as the United States. He explained that while lower global crude prices might be beneficial for consumers, they come at a cost to the government’s earnings, given the country’s dependence on oil exports. “With 1.4 million barrels per day, price drops lead to revenue losses,” he noted.
Ahmed also provided insight into the broader regulatory oversight managed by NMDPRA, which spans crude oil refineries, modular refining plants, petrochemical and gas facilities, and the nation’s distribution infrastructure. Of the ten licensed refineries in Nigeria with a combined capacity of 1.2 million barrels per day, only 57.8% are currently functional, hindered by a mix of operational and structural issues.
The Kaduna Refinery’s rehabilitation was previously announced in 2023 by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who stated that work would commence in the final quarter of 2024.
Earlier this year, the Nigerian National Petroleum Company Limited (NNPC Ltd.) confirmed ongoing upgrades at both the Kaduna and 150,000 barrels-per-day Port Harcourt refineries, aimed at meeting international performance standards.
As the Kaduna plant edges closer to full reactivation, optimism is growing that its revival will not only meet domestic demand but also ease pressure on Nigeria’s foreign exchange reserves, often strained by fuel imports, thereby contributing to a more stable naira.