- Warri Refinery restarted operations after being inactive since 2015, increasing Nigeria’s refining capacity
- Increased competition in the downstream oil sector expected to push domestic refiners to reduce prices
- The Warri Refinery’s reopening could also help Nigeria export refined products to neighbouring countries according to industry experts
Oil marketers and the Nigerian Midstream and Downstream Petroleum Regulatory Authority announced that the prices of refined petroleum products are set to decrease further following the resumption of operations at the Warri Refining and Petrochemicals Company Limited (WRPC).
On Monday, December 30, industry stakeholders noted that competition in the downstream oil sector would intensify, as domestic refiners would now face pressure to lower their prices to attract buyers.
Fuel prices expected to drop
This development came after the Nigerian National Petroleum Company Limited (NNPCL) confirmed that the WRPC, with a refining capacity of 125,000 barrels per day (bpd), had resumed operations.
The Warri refinery, which had been inactive since 2015 due to prolonged repairs, began refining activities on December 28, at its Area 1 plant, where crude oil was successfully introduced into the system. This follows the restart of the Port Harcourt Refinery in November, which has a capacity of 60,000 bpd.
NNPCL’s Group Chief Executive Officer, Mele Kyari, officially announced the restart of operations at the Warri Refinery during a tour of the facility on Monday.
He said, “We are taking you through our plant. This plant is running. Although it is not 100 per cent complete, we are still in the process. Many people think these things are not real. They think real things are not possible in this country. We want you to see that this is real.”
Although repairs were not yet fully completed, Kyari confirmed that production had begun.
With the addition of Warri’s refining capacity, Nigeria’s overall refining output has increased, further bolstering the expectation of a reduction in the price of Premium Motor Spirit (PMS).
The launch of the Dangote Refinery, with a capacity of 650,000 bpd, and the Port Harcourt Refinery, now operating at a total capacity of 210,000 bpd (comprising 60,000 bpd for the old plant and 150,000 bpd for the new plant), further strengthens the country’s domestic refining capacity.
Warri Refinery revival to promote competitive fuel pricing
The Major Energy Marketers’ Association of Nigeria (MEMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) both welcomed the resumption of operations at the Warri refinery. They expressed optimism that it would foster greater competition, diversify supply sources, and ultimately lead to lower fuel prices.
MEMAN’s Executive Secretary, Clem Isong, said the Warri Refinery’s location makes it the most direct route to the North, calling its revival "good news" for the industry.
“The market becomes more competitive and we are diversifying supply.
On whether it would lead to price reduction, he stated, “There are many factors that affect price, competition is always good and you can always get your product at the best price.”
“If there is excess supply, it will keep bringing down the price. We now run a free market and it is about demand and supply. It will continue bringing down the price. It will decongest Lagos.”
Energy expert Dr Ayodele Oni also noted that the reopening of the Warri Refinery would not only increase local refining capacity but could also allow Nigeria to export refined products to neighbouring countries.
“We can refine more and even have some to sell. We now stop being hewers of wood and drawers of water. We add value to what we produce and can make/ do more with our base resources. This is very pleasant news,” he said.
Nigeria tops list of African countries with highest number of refineries
Meanwhile, TheRadar earlier reported that Nigeria topped the continent in oil refining infrastructure with nine facilities, including the massive Dangote Refinery.
South Africa, Ghana, Angola, and Sudan also featured, contributing significantly to Africa's refining capacity.