The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued licences to three oil companies to establish refineries. The new facilities are set to add 140,000 barrels per day (bpd) to the nation’s refining capacity, significantly strengthening Nigeria’s ability to meet its own fuel demands and reduce reliance on imported refined products.
The announcement, made by NMDPRA on Friday via the social media platform X, reveals that the three new refineries will be located in different parts of Nigeria: Edo, Delta, and Abia states. The oil companies receiving these licences include Eghudu Refinery Limited, MB Refinery and Petrochemicals Company Limited, and HIS Refining and Petrochemical Company Limited.
Eghudu Refinery Limited, located in Edo state, has been granted a licence to construct a refinery capable of processing 100,000 barrels per day. This is the largest of the three refineries, and it will play a significant role in increasing the country’s refining capabilities.
MB Refinery and Petrochemicals Company Limited, situated in Delta state, has been awarded a licence to establish a 30,000 bpd refinery. While smaller in scale, this refinery is still expected to contribute to Nigeria’s efforts to boost its domestic production of refined petroleum products.
Finally, HIS Refining and Petrochemical Company Limited, based in Abia state, will set up a 10,000 bpd refinery, which, although modest in capacity, will still be a welcome addition to the nation’s refining infrastructure.
Engr. Farouk Ahmed, the Chief Executive of NMDPRA, personally presented the licences to the Managing Directors of the three companies. In his speech, he highlighted that these new refineries would go a long way in addressing the country’s long-standing challenges with fuel production and supply.
“These licences will add 140,000 barrels per day to Nigeria’s domestic refining capacity, helping reduce the country’s dependence on imported refined products and improving the overall energy sector,” the NMDPRA stated in its official post.
Nigeria, which is Africa’s largest oil producer, has struggled for years with its refining capacity. The country currently imports a large portion of its refined petroleum products, despite possessing significant oil reserves. This has led to fuel shortages, price hikes, and long queues at filling stations, which have plagued Nigerians for years.
According to the NMDPRA, the country’s existing refineries, located in places such as Port Harcourt, Warri, and Kaduna, have been operating far below their full potential. Many of these refineries have suffered from years of neglect, poor maintenance, and mismanagement, leading to suboptimal performance. The new licences aim to change that by encouraging private investment in refining infrastructure, with the hope of increasing domestic refining and reducing the country’s reliance on imported fuel.
With the new refineries in place, the NMDPRA expects Nigeria’s domestic refining capacity to see a significant boost, helping the country better meet its energy needs. By the end of 2025, if all the refineries under construction are completed and begin operations, they could help meet more of Nigeria’s fuel demands and possibly even reduce the cost of petrol at the pump.
The new refinery licences are part of a broader effort by NMDPRA to revitalise Nigeria’s oil sector, which has been plagued by underinvestment and mismanagement. One of the key goals of the current administration is to ensure that Nigeria does not continue to export crude oil and import refined products.
In August 2024, NMDPRA also issued an operational licence to Edo Refinery and Petrochemical Company Limited, located in Ologbo, Edo state. This licence, which allows the company to begin full operations as a refinery, represents the final stage of approval for that plant. The operational licence is crucial because it signifies that the refinery is now ready to process crude oil and produce refined products for the Nigerian market.
The new refineries are expected to bring both economic and environmental benefits to Nigeria. Economically, the addition of 140,000 bpd to the country’s refining capacity will likely reduce the need for fuel imports, which have been a significant drain on the country’s foreign exchange reserves. Nigeria spends billions of dollars annually on importing refined petroleum products, a situation that has caused serious economic challenges.
The new refineries could also help stabilise fuel prices in the country by reducing the frequent disruptions in supply caused by the reliance on imported fuel. With more refineries operating domestically, Nigeria would be in a better position to control its fuel production and pricing, ensuring a more stable supply for consumers.
