By Joy Yesufu
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Mr. Bayo Ojulari, has revealed that Nigeria’s state-owned refineries were operating at what he described as a “monumental loss,” prompting management to suspend operations to halt further financial drain on the country.
Ojulari made the disclosure on Wednesday in Abuja during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026, where he offered a candid assessment of the commercial realities confronting NNPC’s refining assets.
He acknowledged widespread public frustration over the refineries, noting that the anger was understandable given the enormous public funds committed over the years and the expectations placed on the facilities.
“On the refineries, Nigerians were angry. A lot of money has been spent, and expectations were very high. So we were under extreme pressure—extreme pressure,” Ojulari said.
The NNPC chief explained that refining was not his primary area of expertise, having spent most of his career in the upstream segment of the oil and gas industry, but stressed that accountability required swift mastery of the sector.
“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 said.
Ojulari noted that an internal review of refinery operations quickly exposed the scale of the financial losses being incurred.
“The first thing that became clear and I want to say this very clearly is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now,” he stated.
He disclosed that despite pumping crude oil into the refineries on a monthly basis, utilisation rates remained between 50 and 55 per cent, leading to significant value erosion.
“We were spending a lot of money on operations and contractors. But when you look at the net outcome, we were simply leaking value,” he said.
More concerning, according to Ojulari, was the absence of a credible pathway to financial recovery.
“Sometimes you make a loss during an investment phase, but you have a clear line of sight to recovery. That line of sight was not clear here,” he added.
Consequently, he said the first major decision of his leadership was to suspend refinery operations to stop further losses and allow for a comprehensive reassessment.
“We decided to stop the refinery and do a quick check. The plan was that if things were properly lined up, we would reopen and work on them,” Ojulari said.
He further revealed that part of the value destruction was linked to the quality of refined products, citing the Port Harcourt Refinery as an example.
“The crude we were feeding into Port Harcourt was producing mid-grade products. When you aggregate their value against what was put in, it was simply a waste,” he said.
Ojulari admitted that the decision to shut down operations was politically sensitive, given longstanding pressure on NNPC to keep the refineries running to support domestic fuel supply.
“There was enormous political pressure to keep the refineries producing. But when you have been trained for over 35 years to focus on commerciality and profitability, you can’t ignore that reality,” he said.
Nigeria’s four state-owned refineries two in Port Harcourt, one in Warri, and one in Kaduna have for decades operated far below installed capacity, despite repeated turnaround maintenance projects costing billions of dollars.
At various times, the facilities have run at single-digit capacity or been completely shut down, leaving Africa’s largest oil producer heavily dependent on imported refined petroleum products.
Between 2015 and 2023, successive administrations approved multiple rehabilitation contracts for the refineries, yet domestic refining output remained largely negligible, intensifying public scrutiny of NNPC’s operational efficiency.
Ojulari’s remarks represent one of the most forthright acknowledgements by an NNPC chief executive that continued refinery operations, under prevailing conditions, were economically unjustifiable.
The comments also signal a broader shift under the Petroleum Industry Act toward stricter commercial discipline within NNPC Ltd, even in politically sensitive areas such as domestic refining.
