Experts in the Nigerian oil and gas sector have condemned the petrol blending controversy that has hit the Nigerian National Petroleum Company Limited following the resumption of operations at Port Harcourt Refinery on November 26 after more than 30 years of dormancy.
ThisNigeria recalls that critics had alleged that the refinery operates as a blending facility rather than a crude oil processing plant.
The old Port Harcourt Refinery, the flagship of Nigeria’s refining sector, was revived by the NNPCL.
The journey to its revival is littered with missed deadlines and challenges. From the 2000s to the early 2010s, refurbishment deadlines were set and missed, and more funding was needed, causing operational inefficiencies and bureaucratic delays.
Speaking at a ceremony to mark the resumption of operations, NNPCL’s Group Chief Executive Officer, Mele Kyari, called the achievement ‘monumental’ and a turning point for Nigeria’s energy sector.
This time, the group CEO adopted a more cautious approach, refraining from setting specific timelines while quietly working towards operational readiness.
He thanked President Bola Tinubu for his steadfast support of the rehabilitation project and to NNPCL’s Board and workforce for their dedication.
In a statement, NNPCL’s Chief Corporate Communications Officer, Femi Soneye, described the refinery’s re-streaming as fulfilling the company’s commitment to restoring domestic refining capabilities.
According to him, the refinery is currently operating at 90 percent throughput and produces straight-run gasoline (Naphtha) blended into 1.4 million litres of PMS daily, 900,000 litres of kerosene, 1.5 million litres of Automotive Gas Oil (Diesel), 2.1 million litres of Low-Pour Fuel Oil (LPFO), and additional volumes of Liquefied Petroleum Gas (LPG), also known as cooking gas.
A former Group Executive Director at NNPCL, Alex Ogedengbe, said the old refinery has a single conversion unit, while the new facility boasts four conversion units, significantly boosting its efficiency.
However, most of the experts who spoke commended the refinery for conforming to international gasoline production specifications by incorporating blending components, such as C5 from Indorama Petrochemicals.
According to them, the practice is standard in the global refining industry, based on the intricacies of producing fuel that aligns with regulatory standards.
A prominent petroleum economist, Prof Wumi Iledare, described the development as a transformative milestone.
He said the refinery’s current capacity of approximately 60,000 barrels per day represents 11.1 percent of the Nigerian National Petroleum Company Limited’s (NNPCL) domestic refining capacity, offering a critical opportunity to reduce the country’s dependency on imported fuel.
“We must not underestimate a marginal move in a positive direction, assuming transparency, accountability, and business ethics are displayed.
“Yes, the 60,000 barrels per day NPHR, though marginal at best, within the context of supply availability, accessibility, and perhaps affordability, is a positive thing supplementing the volume expected from Dangote Refinery and others for now,” he said.
Speaking during a recent webinar hosted by the Major Energy Marketers Association of Nigeria (MEMAN), Vice President of Crude Oil at Argus Media, James Gooder, noted that combined with the Dangote Refinery’s output, the Port Harcourt Refinery could enhance supply stability and potentially lower fuel prices.
However, Gooder cautioned that drastic price reductions are only possible with addressing Nigeria’s foreign exchange challenges and fluctuating global crude oil prices.
An energy analyst, Light Shedrach, recently interviewed on TVC, called for a broader diversification of Nigeria’s oil and gas downstream sector to foster competition and reduce some players’ monopolistic tendencies.
Shedrach said, “The Port Harcourt Refinery demonstrates what is possible when strategic planning meets commitment. If Nigeria can rehabilitate the Warri and Kaduna refineries and address lingering inefficiencies, the country could overcome its fuel and energy crises.”
He highlighted the importance of accelerating the development of modular refineries to complement large-scale facilities like Port Harcourt and Dangote.
Responding to criticism of the refinery’s blending processes, which incorporate components like crack C5 from Indorama Petrochemicals, he clarified that blending is a standard practice globally to meet product specifications.
Shedrach stressed the need for the media to report with accuracy and avoid sensationalism, which can exacerbate public anxiety.
“We must provide Nigerians with verifiable information,” he added, “This is not the time for divisive rhetoric; it is a time to build trust and transparency.”
He, therefore, called on the NNPCL to reinvest its recent surplus revenues- reportedly exceeding N800bn- into rehabilitating other refineries and expanding modular refining projects.
He noted that competition among refineries is expected to drive efficiency and potentially lower fuel prices.
During an interview on Channels TV, Bode Sowomi, a prominent gas consultant and Chairman of the Energy Transition Study Group of the Nigerian Gas Association, emphasised that while the refinery’s reactivation might not mark a ground-breaking achievement, it is nonetheless a significant step forward.
He said, “We don’t need to complicate things,” pointing out that multiple governments and the NNPCL had previously attempted to restart the facility without success.
“The fact that the refinery is now operational, despite past challenges, is a major accomplishment,” Sowomi said, attributing the milestone to the determination and strategic planning that overcame the internal issues, including corruption, which had plagued the refinery for years.
“The jinx has been broken,” he said.
Sowomi also highlighted the economic benefits for the host community. The refinery’s operations will spark increased economic activities, including supplies to local vendors, food, and other services.
The expert further addressed the often misunderstood concept of blending, which has become a topic of debate regarding the refinery’s output.
Refining, he explained, is a delicate process rooted in the principles of fractional distillation.
“This is basic chemistry,” he said.” Crude oil is refined through steps where different components are distilled at varying temperatures, each serving a unique purpose.
“Diesel, kerosene, and naphtha are among the key products derived through this process, with each component having a distinct boiling point that allows for their separation,” he said.
“Blending is not a criminal activity but a standard global practice in petroleum refining. “It is simply the process of mixing different crude oil components to produce a product that meets specific specifications,” he clarified.
He explained that blending is essential to achieving consistent quality and performance of refined products.
“Blending is not a problem; it’s a solution,” he remarked.
According to Sowomi, having more refineries will help eliminate foreign oil companies’ monopolistic tendencies and ensure that the actual cost of refined products is reflected in the pump price.
As the Nigerian government pushes ahead with its plans to revamp additional refineries, including the Warri and Kaduna facilities, the experts have charged the government and industry stakeholders to remain focused on the long-term vision of energy self-sufficiency.
