Nigeria Foresees Fuel Price Drop as Port Harcourt Refinery Resumes Operations, Aiming to Curtail Imports and Revitalize Oil Sector

Refinery Operations Begin: Fuel Price Expectations

Port Harcourt Refining Company, PHRC, Limited initiated operations on December 20, 2023, with a capacity of 210,000 barrels per day.

This event, signaled by a viral video showing the refinery’s flare, is anticipated to prompt a drop in fuel prices from the current N617 per liter.

Anticipated Shift in Fuel Pricing and Import Policy

Months ago, Senator Heineken Lokpobiri announced the refinery’s operational restart in December 2023, aiming to eliminate the need for fuel imports in Nigeria.

This aligns with the Nigerian National Petroleum Corporation Limited’s declaration to halt petroleum product imports by December 2024, emphasizing a shift toward self-sufficiency in fuel production.

Refinery Renovation and Impact on Sector Crisis

A significant renovation investment of $1.5 billion was authorized in March 2021 for the Port Harcourt Refinery’s overhaul. Over the last decade, the Nigerian government allocated N11.35 trillion ($25 billion) for repairs across the country’s three refineries.

Stakeholders’ Confidence and Future Predictions

Stakeholders from the downstream petroleum sub-sector, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), expressed confidence in resolving the current energy sector crisis.

They anticipate a resolution with the anticipated restart of operations at the Port Harcourt Refinery in January.

Expectations for Fuel Price Reduction

Kenneth Korie, NOGASA’s national president, and Dr. Billy Harry, representing PETROAN, foresee a substantial reduction in petroleum product prices once the refineries, including Port Harcourt, Kaduna, and Warri, resume operations.

They emphasized that the revitalization of these refineries would contribute to lowering product prices, albeit not to previous levels due to exchange rate factors.

Synergy for Sector Transformation

Korie emphasized the historic significance of collaboration between retail outlet owners and suppliers’ associations, aiming to minimize petroleum product imports and ensure the refineries’ effective operation.

He stressed the potential for transformative changes in the economy and the downstream sector’s activities.

This collaboration among stakeholders signifies a shift in Nigeria’s oil sector, with optimism for reduced import reliance and enhanced domestic refinery capacities, potentially impacting fuel pricing and market dynamics.