Nigeria is rapidly emerging as a refining hub in West Africa, yet the journey remains fraught with challenges. The Crude Oil Refinery-owners Association of Nigeria (CORAN) has expressed optimism about the nation’s refining potential but has also raised concerns about persistent supply challenges that hinder the full operation of already established refineries.
The association’s remarks come at a time when the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has made strides by licensing a new private refinery. Located in the Ughelli area of Delta State, the refinery, with a projected capacity of 10,000 barrels per day, is set to be constructed by MRO Energy Limited. The announcement, made earlier this week on NMDPRA’s official X (formerly Twitter) page, marks another step in the country’s ambition to reduce its reliance on imported petroleum products and boost local refining capacity.
CORAN, however, cautioned that while the new development signals progress, many of the existing refineries are still struggling with consistent and reliable crude oil supply. These supply challenges—stemming from issues such as regulatory hurdles, insufficient domestic feedstock, and financing difficulties—have kept many refineries from operating at full capacity. This has limited the impact of Nigeria's refining sector on the broader economy and energy security.
In a statement, the association highlighted that the modular refineries, designed to provide smaller-scale but efficient solutions, continue to face a significant challenge in securing the crude oil necessary to operate at their potential. As a result, more than half of Nigeria's modular refineries are either idle or functioning well below their optimal capacity.
Despite these setbacks, the new refinery license in Delta State provides a ray of hope. The refinery’s 10,000 barrels per day capacity, although modest in comparison to larger, more advanced refineries, will contribute significantly to Nigeria’s long-term goal of self-sufficiency in refined products. This move is expected to ease the pressure on the country’s import dependency while generating job opportunities and boosting local economies.
Nigeria’s journey to becoming a regional refining powerhouse is gaining momentum, but addressing the persistent supply challenges will be key to unlocking the full potential of its refining sector. The government, along with industry stakeholders, must focus on building a more reliable and sustainable supply chain, ensuring that both new and existing refineries have the resources they need to operate at full capacity. Only then will Nigeria truly establish itself as the leading refining hub in West Africa.
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