Expert urges economic discipline in refinery revival
Lagos, Aug. 2026 (TBL Africa) Petroleum economist Prof. Wumi Iledare has urged the Federal Government to prioritise profitability, accountability and economic efficiency in rehabilitating Nigeria’s state-owned refineries.
Iledare said President Bola Tinubu’s assurance that the refineries would resume sustainable operations was laudable, but achieving it required strong economic discipline.
The Professor Emeritus of Petroleum Economics and Policy Research at Louisiana State University spoke on Sunday in Lagos.
Tinubu, on Aug. 13, assured Nigerians that the country’s refineries would be revived under a comprehensive government reset.
The President said the Federal Government was undertaking restructuring and technical assessments to make the facilities productive and profitable.
Iledare said the success of the Port Harcourt, Warri and Kaduna refineries should extend beyond restarting production.
He said the facilities must operate efficiently, competitively and profitably without becoming recurring burdens on public finances.
The petroleum economist identified clear timelines, a new business model and reliable, competitively priced crude supply as critical to achieving the objective.
He urged the government to establish measurable timelines for the three refineries to achieve sustainable operations.
Iledare also called for transparent information on project milestones, investment requirements, expected utilisation rates and other performance indicators.
“Politics must not trump economics,” he said, stressing transparency and accountability in Nigeria’s evolving energy sector.
He said refinery management must shift from continued government-funded rehabilitation towards creating sustainable economic value from the assets.
According to him, this requires professional management, operational autonomy, adequate maintenance funding and cost-reflective economics.
He also advocated transparent crude-supply arrangements and performance-based governance to ensure the refineries operate sustainably.
Iledare warned that without such measures, Nigeria could repeat the cycle of rehabilitation, temporary operations, shutdowns and renewed public funding.
On crude supply, he said reliable, predictable and competitively priced feedstock remained essential to the refineries’ commercial viability.
He urged the government to clearly define crude-supply arrangements and pricing mechanisms applicable to the facilities.
Iledare also questioned whether the refineries would compete fairly with other domestic and international refining options.
He cautioned against equating nameplate capacity with sustainable production, saying actual performance should determine the success of the rehabilitation programme.
He listed capacity utilisation, refinery yields, product mix, operating costs and profit margins among key indicators for assessing performance.
Ilebare said the ultimate test should be whether these refineries can consistently produce petrol, diesel and other petroleum products at competitive costs.
He said the facilities must also generate “an acceptable return on the capital invested” to justify the government’s expenditure.
Iledare stressed that the objective should go beyond simply declaring the refineries operational.
“The real policy test is whether they can function efficiently, competitively, sustainably and profitably without becoming a recurring burden on the public purse,” he said.
He noted that an asset could not be considered successful merely because it produced output.
According to him, petroleum economics requires that the value generated from an asset exceed the economic cost of resources committed.
Iledare said this distinction would determine whether the government’s refinery initiative becomes genuine industrial transformation or another costly rehabilitation cycle.
