The Federal Executive Council has approved contracts for the rehabilitation of Warri and Kaduna refineries at a cost of $1.4 billion.
The breakdown shows that $897 million is earmarked for the Warri refinery and $586 million for Kaduna refinery.
Nigeria has four refineries – including two in Port Harcourt – but all have struggled to function optimally as the country continues to import petroleum products.
The rehabilitation is expected to turn around the refineries and set them up to meet local oil demands.
In June, Managing Director of NNPC, the national oil company, Mr Mele Kyari, said the rehabilitation of the refineries, in conjunction with private efforts such as the Dangote Refinery, will transform Nigeria into a “hub of petroleum products and supply”.
“It’s going to change the dynamics of petroleum supply globally in the sense that the flow is coming from Europe today and it is going to be reversed to some other direction,” he said.
“We will be the supplier for West Africa legitimately and also many other parts of the world.”
Success of the refineries can also have a positive impact on the street-level price of petroleum products such as petrol.