The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC), Bayo Ojulari, has revealed that Nigeria’s state-owned refineries were operating at what he described as a “monumental loss,” a situation that compelled his management team to halt operations to prevent 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. He acknowledged that public frustration over the refineries was justified, given the enormous public funds invested over the years and the high expectations attached to the facilities.
According to him, although his professional background was largely in the upstream sector, accountability required that he quickly understand the realities of refinery operations upon assuming office. A detailed review by his team, he said, exposed a grim financial picture. NNPC was consistently supplying crude oil to the refineries every month, yet utilisation rates remained around 50 to 55 per cent, while operating and contractor costs continued to rise, leading to severe value erosion.
Ojulari stated that unlike normal investments where temporary losses may occur with a clear recovery plan, there was no credible pathway to profitability for the refineries under existing conditions. He cited the Port Harcourt Refinery, noting that the crude processed there yielded mostly mid-grade products whose combined value was significantly lower than the input cost.
Faced with these realities, NNPC’s leadership took the difficult but necessary decision to suspend refinery operations to stop further losses and allow for a comprehensive reassessment. Ojulari admitted the move was politically sensitive, as past administrations often faced pressure to keep refineries running to ensure fuel supply, but stressed that commercial discipline had to take precedence.
Nigeria’s four state-owned refineries, located in Port Harcourt, Warri, and Kaduna, have historically operated far below capacity despite repeated and costly rehabilitation efforts. Ojulari’s remarks represent one of the most candid acknowledgements yet that continued refinery operations, under prevailing conditions, were economically unsustainable, signalling a shift toward profitability-driven decision-making under the Petroleum Industry Act.
