The Federal Executive Council (FEC) has approved $1.5 billion (about N600 billion) for the rehabilitation of the Port Harcourt refinery.
The FEC approved the amount at its virtual meeting held Wednesday and presided by President Muhammadu Buhari.
The approval comes amidst a controversial price increase in the pump price of petrol that was later reversed.
Although Nigeria has four refineries, all government-owned, it currently imports virtually all its refined petroleum products.
The Minister of State for Petroleum, Timipre Sylva, who briefed reporters after the FEC meeting said the rehabilitation will be done in three phases of 18, 24 and 44 months.
He said the contract was awarded to an Italian company, Tecnimont SPA, who, according to the minister, are experts in refinery maintenance.
Mr Sylva said the funding of the repairs will be from many components including the Nigerian National Petroleum Corporation (NNPC), Internally Generated Revenue (IGR), budgetary provisions and Afreximbank.
“The Ministry of Petroleum Resources presented a memo on the rehabilitation of Port Harcourt refinery for the sum of 1.5 billion, and that memo was $1.5 billion and it was approved by council today.
“So we are happy to announce that the rehabilitation of productivity refinery will commence in three phases. The first phase is to be completed in 18 months, which will take the refinery to a production of 90 percent of its nameplate capacity.
“The second phase is to be completed in 24 months and all the final stage will be completed in 44 months and consultations are approved.
“And I believe that this is good news for Nigeria.”
The approval of the $1.5 billion to rehabilitate the refineries is expected to be greeted with mixed feelings as the country has in the past spent billions of dollars on refinery maintenance. Despite such expenditure, however, the refineries have not worked with many experts calling for their privatisation.