ABUJA, Dec 20 (Reuters) - Nigeria's president has approved a plan to privatise the country's four oil refineries, which currently run well below capacity owing to decades of mismanagement in Africa's top oil producer, the government said on Friday.
The plan is one of a range of vital economic reforms that, with the exception of power privatisation and some agricultural sector reforms, have been stalled over the past year.
They include a major overhaul of the oil industry which contributes 80 percent of government revenue.
Despite pumping 2 million barrels of crude a day, Nigeria relies on imports for 80 percent of its fuel needs due to defunct refineries. Fixing its decrepit refineries - two in the main oil city of Port Harcourt and one in Warri, in southern Nigeria, and another in Kaduna, in the north, would boost growth rates of Africa's second-biggest economy.
"In furtherance of the economic reform programme of his administration, President Goodluck Jonathan has approved the commencement of the privatisation of the nation’s four refineries," the Bureau of Public Enterprises said in a statement.
It gave no time frame for the sale of the refineries, which have a combined capacity of 445,000 barrels per day (bpd). Selling them off is a requirement of the Petroleum Industry Bill (PIB), a wide-ranging reform plan currently stuck in parliament.
Industry sources question who would want to invest in local refineries when there is a global glut in refining capacity, and while Nigeria's fuel pump prices are regulated at well below market rates using a costly state fuel subsidy.
They also say problems of crude meant for refineries being diverted to exports in corrupt deals would need to be addressed, as they frequently leave a shortfall of crude.
Earlier this year Africa's richest man Aliko Dangote said he planned to invest $9 billion to build a refinery and petrochemical plant with a 400,000 bpd capacity.
Several multi-million dollar maintenance contracts for Nigeria's refineries have been handed out over the last decade without great impact on their performance.
(Reporting by Camillus Eboh and Felix Onuah; Writing by Tim Cocks; Editing by Susan Fenton)