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,” forcing his management team to halt operations to stop further financial damage.
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 spoke candidly about the realities facing NNPC’s refining business.
He acknowledged that public frustration over the refineries was understandable, given the huge sums of money invested in the facilities over the years and the high expectations of Nigerians.
“People were angry, and rightly so. A lot of money has been spent, and expectations were extremely high. We were under intense pressure,” Ojulari said.
The NNPC boss explained that although his professional background is largely in the upstream sector, accountability required him to quickly understand the refining side of the business after assuming office.
“My background is upstream, so I had to learn very fast. When you are accountable, there is no escape, you must understand what is going on,” he said.
According to Ojulari, a detailed review of refinery operations quickly exposed the scale of the losses.
“The first thing that became very clear is that we were running the refineries at a monumental loss to Nigeria. We were simply wasting money,” he said.
He revealed that NNPC was feeding crude oil into the refineries every month, yet utilisation levels remained around 50 to 55 per cent, leading to significant loss of value.
“We were spending heavily on operations and contractors, but when you looked at the net result, value was just leaking away,” Ojulari explained.
More concerning, he said, was the absence of a clear pathway to profitability.
“In some investments, you may make losses initially, but you can see a line of sight to recovery. In this case, that line of sight was not there,” he added.
As a result, Ojulari said one of the first major decisions taken by his administration was to shut down refinery operations temporarily to allow for a thorough reassessment.
“We decided to stop the refineries and do a quick check. If things were properly aligned, we would reopen and fix them,” he said.
He also pointed to poor product quality as a major contributor to the losses, citing the Port Harcourt Refinery as an example.
“The crude processed in Port Harcourt was producing mostly mid-grade products. When you compared the value of what came out to what went in, it was simply not worth it,” Ojulari said.
Ojulari admitted that the decision to halt operations was politically sensitive, given long-standing pressure on NNPC to keep the refineries running in order to guarantee fuel supply.
“There was a lot of political pressure to keep 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 – Port Harcourt (two plants), Warri and Kaduna have for decades operated far below capacity despite repeated turnaround maintenance projects costing billions of dollars.
At different times, the refineries have run at single-digit capacity or been completely shut down, forcing Africa’s largest oil producer to depend almost entirely on imported fuel.
Between 2015 and 2023, successive governments approved multiple rehabilitation contracts, yet domestic refining output remained minimal, further fuelling public criticism of NNPC’s efficiency.
Ojulari’s remarks represent one of the most frank admissions by an NNPC chief executive that continued refinery operations, under existing conditions, were economically unsustainable.
They also highlight a broader shift under the Petroleum Industry Act, with NNPC increasingly prioritising commercial discipline, even in politically sensitive areas such as domestic refining.
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