The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, has openly admitted that Nigeria’s state-owned refineries were operating at massive losses, prompting his administration to halt their operations to prevent further financial damage to the country.
Ojulari made the revelation on Wednesday in Abuja during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026, where he delivered one of the most candid assessments yet of the nation’s troubled refining sector.
According to the NNPC boss, the refineries were draining national resources despite decades of heavy investment, leaving Nigerians understandably frustrated.
“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure,” Ojulari said.
Nigeria’s four government-owned refineries—Port Harcourt (two plants), Warri, and Kaduna—have consumed billions of dollars in rehabilitation and turnaround maintenance over the years, yet have consistently failed to achieve sustainable output.
‘I Had to Learn Very Fast’
Ojulari disclosed that refining was not his area of expertise when he assumed office, having spent most of his career in the upstream oil sector. However, he said accountability required him to quickly understand the realities of the downstream business.
“My background is upstream, so I was on a vertical learning curve. You are accountable, so you must learn very quickly. Otherwise, there is no escape,” he stated.
‘We Were Running at a Monumental Loss’
Following a detailed operational review, Ojulari said it became clear that the refineries were financially unsustainable.
“The first thing that became clear is that we were running at a monumental loss to Nigeria. We were just wasting money,” he declared.
He explained that NNPC was feeding crude oil into the refineries every month, yet utilisation remained between 50 and 55 per cent, leading to significant value erosion.
“We were spending heavily on operations and contractors, but when you looked at the net outcome, value was simply leaking away,” he added.
More troubling, Ojulari noted, was the absence of a clear path to profitability.
“Sometimes you make losses during investment, but you must have a line of sight to recovery. That line of sight was not clear here.”
Why Operations Were Halted
Ojulari revealed that suspending refinery operations was one of the earliest and toughest decisions taken by his leadership.
“We decided to stop the refinery and do a quick check. If things were properly lined up, we would reopen and work on them.”
He said the shutdown was necessary to prevent further losses while reassessing the commercial viability of the facilities.
Using the Port Harcourt Refinery as an example, Ojulari explained that the crude being processed was yielding mainly mid-grade products whose market value did not justify the cost of refining.
“When you aggregate the value of what was produced compared to what was put in, it was simply a waste.”
Political Pressure vs Commercial Reality
Ojulari acknowledged that the decision was politically sensitive, given public and political pressure to keep refineries running to ensure domestic fuel supply.
“There were political pressures to keep the refinery producing. But when you’ve been trained for over 35 years to focus on commerciality and profitability, you can’t ignore the facts.”
For decades, Nigeria’s refineries have operated far below capacity—sometimes at single-digit utilisation or completely shut down—forcing Africa’s largest oil producer to rely heavily on imported refined petroleum products.
Between 2015 and 2023, successive governments approved multiple multi-billion-dollar rehabilitation contracts, yet domestic refining output remained largely negligible, intensifying public scrutiny of NNPC’s performance.
Ojulari’s remarks mark one of the most forthright admissions by an NNPC chief executive that, under existing conditions, government-run refineries are economically unsustainable. His comments also reflect a broader shift under the Petroleum Industry Act (PIA) toward enforcing commercial discipline, even in politically sensitive sectors like domestic refining.