The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Bayo Ojulari, has revealed that Nigeria’s government-owned refineries were operating at what he described as a “monumental loss,” forcing the company to suspend 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 said public frustration over the refineries was understandable, considering the huge sums invested in their rehabilitation over the years and the persistent failure to deliver meaningful output.
“Nigerians were angry, and rightly so. A lot of money has gone into these refineries, expectations were very high, and we were under extreme pressure,” Ojulari said.
The NNPC chief explained that when he assumed office, refining was not his primary area of expertise, having spent most of his career in the upstream oil sector, but noted that accountability required him to quickly understand the business.
“My background is upstream, so I was on a very steep learning curve. But once you are accountable, you must learn fast. There is no escape,” he said.
Ojulari disclosed that a detailed internal review of refinery operations revealed severe financial inefficiencies.
“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, and I can say that confidently now,” he stated.
According to him, NNPC was feeding crude oil into the refineries monthly, yet utilisation rates remained between 50 and 55 per cent, resulting in significant value loss.
“We were spending heavily on operations and contractors, but when you looked at the numbers, value was just leaking away,” he said.
Ojulari added that the situation was worsened by the absence of a clear pathway to financial recovery.
“Sometimes you accept losses during investment because you can see a line of sight to recovery. In this case, that line of sight was not clear,” he noted.
As a result, he said the management took the difficult decision to halt refinery operations in order to reassess their viability.
“Our first major decision was to stop the refineries and carry out a quick review. The plan was that if things were properly aligned, we would restart operations,” Ojulari explained.
He also raised concerns about the quality and commercial value of refined products, citing the Port Harcourt Refinery.
“The crude processed in Port Harcourt was yielding mid-grade products. When you compared the output value to what went in, it was simply a waste,” he said.
Ojulari acknowledged that the decision to shut down the refineries was politically sensitive, given longstanding pressure on NNPC to keep them running to support domestic fuel supply.
“There was a lot of political pressure to keep producing. But when you have been trained for decades 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 installed capacity despite repeated turnaround maintenance efforts costing billions of dollars.
Ojulari’s comments represent one of the most forthright admissions by an NNPC chief executive that continued refinery operations, under prevailing conditions, were economically unsustainable, signalling a shift toward stricter commercial discipline under the Petroleum Industry Act.
