A New Vision for Nigeria’s Refineries
For decades, Nigeria’s four state-owned refineries have been a subject of intense debate, characterized by high expectations and recurring operational failures. However, on December 21, 2025, the conversation took a decisive turn. Festus Osifo, the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has officially called on the Federal Government to adopt a “middle-ground” approach: the sale of a 51% controlling stake in the NNPC refineries to private investors.
Speaking on Sunday Politics, a programme on Channels Television, Osifo argued that this model is the only way to insulate the nation’s refining capacity from political interference while ensuring long-term energy security.
The NLNG Model: Why 51% is the “Magic Number”
The core of Osifo’s proposal is a replica of the Nigeria Liquefied Natural Gas (NLNG) ownership structure. In this model, the Federal Government maintains a significant 49% minority stake, while a consortium of private, technically competent investors holds the 51% majority.
Why is this 51/49 split so effective?
Private Management: With 51% ownership, the private sector takes the lead in decision-making, ensuring that the refineries are run as profit-driven businesses rather than political tools.
Energy Security: By retaining 49%, the Nigerian government ensures it still has a “seat at the table” to protect national interests and prevent a total monopoly in the fuel market.
Technical Expertise: Majority stakes attract global giants who bring the specialized tools and maintenance culture required to keep complex plants running 24/7.
Debunking the Myth: “The Refineries Never Worked”
One of the most powerful points made by the PENGASSAN President was a correction of public perception. As an engineer with over 20 years of experience, Osifo clarified that the refineries were not shut down because they were “broken” beyond repair, but because they were uneconomical.
“There is a difference between a piece of equipment working and a piece of equipment working efficiently,” Osifo explained.
He revealed that the refineries reached a point where the value of the crude oil being fed into the system was higher than the value of the refined products coming out. This “material balance” issue meant that for every barrel refined, the government was essentially losing money. The decision to shut them down was a strategic move to stop the bleeding and prepare for a total overhaul.
Overcoming Political Interference
A major bottleneck for the NNPC refineries has been the “political pressure” that dictates everything from staffing to maintenance contracts. Osifo highlighted that Nigeria possesses the human capital and indigenous expertise to run these plants, but the current state-led structure hampers their potential.
By moving to a 51% private ownership model, the refineries would be governed by a board of directors focused on efficiency, safety, and return on investment (ROI). This would eliminate the “red tape” that often delays critical spare part orders or leads to the employment of non-essential personnel.
The Economic Ripple Effect: Jobs and Fuel Prices
If the Federal Government follows PENGASSAN’s advice, the impact on the Nigerian economy would be profound:
Job Preservation: Unlike a total sale, the 51/49 model protects the welfare of current workers while creating new technical roles.
Market Competition: A functional NNPC refinery system would compete directly with the Dangote Refinery and imported fuels, naturally driving down prices for the end consumer.
FX Stability: Domestic refining drastically reduces the need for U.S. dollars to import petrol, helping to stabilize the Naira in 2026.
Conclusion: A Pragmatic Path Forward
Festus Osifo’s call is a pragmatic response to a decades-old problem. It acknowledges that while the government shouldn’t run refineries, it shouldn’t completely abandon them either. As the Port Harcourt and Warri refineries continue their rehabilitation efforts in late 2025, the transition to a private-majority model could be the final step in making Nigeria a truly energy-independent nation.
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