The Federal Government has signaled that it may privatize its state-owned refineries to attract investment, enhance competition, and improve efficiency in the downstream oil sector, which is currently dominated by the Dangote Refinery.

The announcement came from President Bola Tinubu’s Special Adviser on Energy, Olu Verheijen, during an interview with Bloomberg TV anchor Joumanna Bercetche on the sidelines of the Abu Dhabi International Petroleum Exhibition and Conference on Tuesday.

Verheijen explained that the potential sale of refineries under the Nigerian National Petroleum Company Limited is among several reform measures the government is considering to reposition the energy sector for sustainable growth.

“It’s one of the options that you have to consider if you find the right technical partner with the right capital,” Verheijen said.

She noted that the refineries have largely relied on subsidies, “but now that we’ve removed the subsidies, we’ve eliminated the distortions in that market.”

Nigeria’s four state-owned refineries, situated in Port Harcourt, Warri, and Kaduna, have a combined installed capacity of 445,000 barrels per day but have remained largely idle for decades, despite repeated turnaround maintenance projects costing the government billions of dollars.

Verheijen stated that under Tinubu, the government’s reform agenda seeks to restore market efficiency and transparency, ensuring the petroleum sector functions on purely commercial terms.

Separately, NNPCL announced last week that it is already looking for technical equity partners capable of managing and operating the Port Harcourt, Warri, and Kaduna refineries to international standards.

“We are looking ahead with optimism to ensure our refineries operate effectively,” NNPC Chief Executive Officer Bayo Ojulari said in a post on X.

Verheijen added that the government views a long-anticipated initial public offering for NNPC as “an end destination.”

“What’s really important to the shareholders is that we have an NNPC that’s a lot more transparent, a lot more efficient and delivers.”

Any potential buyers of the state-owned refineries would face competition from the massive 650,000-barrel-per-day Dangote Refinery, owned by Africa’s richest person, Aliko Dangote.

The company stated last week that the refinery already produces more gasoline and diesel than the local market can absorb, and Dangote recently announced plans to more than double its capacity.