NNPC Boss Reveals Why Nigeria’s Four Refineries Were Shut Down

ABUJA — The Group Chief Executive Officer of the Nigeria National Petroleum Company (NNPC Ltd), Engineer Bayo Ojulari, has revealed why operations at the nation’s government-owned refineries were suspended, citing massive financial losses, low capacity utilisation, and poor product quality.

Speaking at the sideline of the 9th Nigeria International Energy Summit (NIES 2026), Ojulari explained that the refineries were operating at unsustainable levels despite regular crude oil supplies.

Nigeria operates four refineries: two in Port Harcourt and one each in Warri and Kaduna. The refineries have a combined installed capacity of 445,000 barrels per day. The Port Harcourt refineries have a combined capacity of 210,000 barrels per day, while the Kaduna and Warri refineries have installed capacities of 110,000 and 125,000 barrels per day, respectively.

According to Ojulari, even with crude oil supplies, the refineries were operating at just 50 to 55 per cent capacity utilisation, which proved economically unviable.

“Among all the conditions, the refineries were costing more to run, producing low-quality products and losing great money,” the NNPC chief stated.

He explained that the company noticed it was losing substantial amounts of money maintaining the operations. “The first thing we noticed was that we were losing a lot of money doing things the way they were; it was like doing a giveaway. So we decided to stop the losses and fix a bad situation,” Ojulari said.

The NNPC boss detailed the financial drain the refineries represented. “We are pumping cargo every month into the refineries. Utilisation of those cargoes was maybe like 55 and 50 per cent. That cargo is valued a lot. We are spending a lot of money on operations and contractors, but we are seeing no value for the money. There is no particular plan to fix the loss and make things profitable,” he explained.

The revelation confirms what industry observers have long suspected: Nigeria’s state-owned refineries have been operating as massive loss-making enterprises despite consuming billions of naira in maintenance and turnaround costs over the years.

The shutdown of the refineries has significant implications for Nigeria’s petroleum sector and economy. Despite being Africa’s largest oil producer, Nigeria has relied heavily on imported refined petroleum products for decades due to the dysfunction of its domestic refineries.

This dependence on imports has exposed the country to foreign exchange pressures, fuel price volatility, and supply disruptions. The situation became particularly acute during global supply chain challenges and when subsidy payments on imported fuel consumed substantial portions of government revenue.

Ojulari announced that NNPC is planning to partner with global investors to rehabilitate the refineries and make them profitable. “We are planning to partner with global investors to improve our refineries and make them profitable,” he stated, suggesting that private sector expertise and capital may be needed to revive the facilities.

The announcement comes as Nigeria’s petroleum sector undergoes significant reforms following the removal of fuel subsidies and the liberalisation of downstream operations. The Dangote Refinery, a 650,000-barrel-per-day private facility in Lagos, has begun operations and is expected to significantly alter Nigeria’s refined products market dynamics.

However, questions remain about the future of the state-owned refineries and whether rehabilitation efforts will succeed where previous turnaround maintenance projects failed to deliver sustained results. Over the past two decades, successive governments have spent billions of dollars on refinery maintenance and rehabilitation with minimal operational improvements to show for the investments.

Industry analysts have called for transparency in any partnership arrangements to ensure that private investors bring genuine technical expertise and capital rather than merely accessing subsidised crude allocations or other privileges without delivering operational improvements.

The decision to halt operations rather than continue bleeding money represents a departure from past practices where the refineries remained nominally operational despite poor performance. It suggests NNPC under its current leadership is taking a more commercially orientated approach to asset management.

As Nigeria seeks to maximise value from its petroleum resources, the fate of the state-owned refineries will test the government’s commitment to running commercially viable enterprises and its willingness to embrace private sector participation in previously state-dominated sectors.