The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Bayo Ojulari, has disclosed that Nigeria’s state-owned refineries were operating at huge financial losses, prompting his management team to suspend their operations in order to prevent further economic damage.
Ojulari made the revelation on Wednesday in Abuja during a fireside discussion titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026. In what observers described as an unusually frank assessment, the NNPCL boss outlined the commercial and operational challenges confronting the country’s refining assets.
He acknowledged the deep frustration among Nigerians over the persistent failure of the refineries, especially in light of the vast sums of public funds invested in their rehabilitation over the years.
According to Ojulari, public expectations were understandably high, placing immense pressure on the company’s leadership to deliver results. However, an internal review quickly revealed that the refineries were draining resources rather than creating value.
Ojulari explained that upon assuming office, he was faced with a steep learning curve, as his professional background was largely in the upstream segment of the oil and gas industry. Despite this, he said the responsibility of leadership required a swift and honest evaluation of the refineries’ performance.
Following a detailed assessment, the management discovered that the facilities were operating at what he described as “monumental losses.” He said large volumes of crude oil were being supplied to the refineries every month, yet capacity utilisation remained between 50 and 55 per cent, resulting in poor returns and significant value erosion.
In addition to high operational and contractor costs, Ojulari noted that there was no clear or credible pathway to financial recovery. While losses can be expected during major investments, he said the absence of a visible plan to reverse the trend made continued operations unjustifiable.
As a result, halting refinery activities became one of the earliest and most difficult decisions taken by his administration. Ojulari said the shutdown was intended to stop further losses while allowing the company to reassess the viability of the facilities and determine whether reopening them would make commercial sense.
He further revealed that product quality also contributed to the losses, citing the Port Harcourt Refinery, where the crude oil processed yielded largely mid-grade products with limited market value. According to him, the output did not justify the cost of the crude supplied to the plant.
Ojulari admitted that the decision to suspend operations was politically sensitive, given longstanding expectations for NNPC to maintain domestic refining capacity and reduce fuel imports. However, he stressed that his decades of experience in the industry had ingrained in him the importance of commercial discipline and profitability.
Nigeria’s four state-owned refineries — located in Port Harcourt, Warri and Kaduna — have for decades struggled with chronic underperformance, often operating far below capacity or remaining completely shut down. This has forced Africa’s largest oil producer to rely heavily on imported refined petroleum products, despite being a major crude oil exporter.
Between 2015 and 2023, successive governments approved multiple turnaround maintenance and rehabilitation contracts worth billions of dollars, yet domestic refining output remained minimal, fueling public criticism and concerns over inefficiency.
Ojulari’s comments mark one of the clearest acknowledgements by an NNPCL chief executive that the continued operation of the refineries, under existing conditions, was economically unsustainable. The remarks also reflect a broader shift under the Petroleum Industry Act toward enforcing commercial viability and financial discipline, even in politically sensitive areas such as domestic refining.
