The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, has claimed that the recurring shutdowns of Nigeria’s state-owned refineries are driven more by political motives than operational challenges.
PENGASSAN also accused petroleum marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of Premium Motor Spirit should range between N700 and N750 per litre.
Speaking at a world press conference on Nigeria’s Oil and Gas industry and state of the nation on Monday in Abuja, Osifo said the inefficiencies plaguing Nigeria’s refineries, especially the Port Harcourt Refinery, may not be due to technical shortcomings but stem largely from political interference.
Osifo noted that despite billions of naira totalling $2.5bn sunk into rehabilitation efforts over the years, the nation’s refineries have remained largely unproductive, with shutdowns frequently occurring under questionable circumstances.
Recall that the state-owned firm announced a temporary shutdown of the Port-Harcourt refinery for 30 days over maintenance activities.
The facility is expected to be back on stream next week on Tuesday.
Osifo said, “On the state of the refinery, we are aware, as of today, that our refinery, most especially Port-Harcourt refinery, was shut down. And the reasons they gave were that they wanted to carry out periodic maintenance.
“But also the fact that in those refineries today, as you have known and as has been reported widely, the level of efficiency of those refineries is not optimal. So we are calling on the government and the handlers of the refineries, the management of Nigerian National Petroleum Company Limited, to look at the full scope of the refineries, to look at the operational model of the refineries and to yield to the time-tested call that we have made in PENGASSAN. The call that we have made for over 15 years now.
“Our successive administrations in PENGASSAN have called on government at all levels, most especially because these are federation assets, to come together and ensure that our refineries are managed optimally. But we all know the politics that come into issues like this. We all understand the Nigerian politics that comes in when it comes to national asset management.
“That is why, over the last 15 years or more, we have called for the government to bring about the Nigerian Liquefied Natural Gas model in the management of the refineries. Because that model has worked.
“So why can’t we bring about that same model, that similar model in the management of our refineries? By bringing in investors, internationally certified investors who have built or managed refineries all over the world. Then you bring them, the government will now reduce their shareholding to a maximum of 49 per cent. And you allow these investors to now take the lion’s share as it is today.”
Osifo noted that adopting this model would significantly reduce political interference, allowing the refineries to operate based on commercial principles rather than political interests.
“So if this model has worked elsewhere, why can’t we bring this model into operation in NLNG? Because when this is done, we will reduce politics. When this is done, it will reduce government interference at all levels. Today, the instrument that brings about the NLNG spells out the funding structure, management structure, and defines what the operational structure should be. And that is why NLNG is profitable today.
“So why can’t we bring this similar structure to the operations of the three refineries? So that we will not be having political decisions.
“Because at times, I will tell you, that when refineries are shut down, they are political decision. They may not be operational decisions. They may not be due to any other reason, but politics.
“So that is our clarion call that we have been making in the last 15 years, and we are also pushing for that today.”
Speaking further, the union president accused petroleum marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of Premium Motor Spirit should range between N700 and N750 per litre.
He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.
He said that despite crude prices dropping from about $80 to $60 per barrel, petrol continues to sell at around N900 per litre.
A litre of petrol currently sells between N875 to N905 per litre, depending on location nationwide.
“In the downstream today, in the Nigerian oil and gas industry, we have seen a trend,” Osifo said. “When the price per litre of petrol was around N900, crude oil was selling at about $80 per barrel. Today, with crude hovering between $62 and $65, there has been no commensurate reduction in the pump price.”
Osifo attributed the pricing inconsistency to the failure of the Nigerian Midstream and Downstream Petroleum Regulatory Authority to effectively monitor and regulate pricing under the deregulation framework.
“NMDPRA should not watch the suppliers of products exploit the citizenry on the pretence of deregulation,” he said.
Explaining the pricing mechanism, Osifo stated that crude oil prices and the exchange rate account for about 80 per cent of the final retail price of PMS.
Based on prevailing international pricing benchmarks, he said the cost of fuel should have adjusted downward.
“There is what we call PLAT,” he said, referring to Platts’ oil price benchmark. “If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”
He called on NMDPRA to immediately begin publishing pricing templates to ensure transparency and to prevent arbitrary pricing under the deregulated system.
The trade union also raised the alarm that worsening insecurity in Nigeria’s oil-producing areas, especially in the waterways, is forcing multinational oil companies to divest from the country, despite newly introduced cost-saving incentives by the Federal Government.
He commended the recently signed Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) by President Bola Tinubu, but failed to address the root causes of the high cost of production, which he said is most notably insecurity.
He said, “The reason, the chief reason, the majority of the oil and gas operators, the international oil and gas companies started leaving Nigeria is principally because of insecurity.
“The cost of securing facilities, the cost of securing infrastructure in the Nigerian oil and gas industry became prohibitive. That is why they found places like Mozambique, Guyana, Angola, and Congo much more attractive.”
The Executive Order, signed in May, introduces performance-based tax credits up to 20 per cent, for upstream companies that meet defined industry benchmarks for cost efficiency.
While PENGASSAN acknowledged the effort, Comrade Osifo insisted that without government-backed security, the real issue would remain unresolved.
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