The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), 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 to 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 rare and blunt assessment of the operational and commercial realities of the nation’s refining assets.
The NNPC boss acknowledged widespread public frustration over the refineries, noting that Nigerians had every reason to be upset considering the huge public funds invested over the years.
“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,” he said.
Bellnews reports that Nigeria’s four state-owned refineries, Port Harcourt (two plants), Warri and Kaduna, have consumed billions of dollars in rehabilitation and turnaround maintenance costs over decades, yet have largely failed to deliver sustained output.
‘I Had To Learn Very Fast’
Ojulari admitted that refining was not his area of expertise when he assumed office, having spent most of his professional career in the upstream oil 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.
According to him, accountability demanded a rapid and honest assessment of the refineries once his team settled in.
‘We Were Running At A Monumental Loss’
Ojulari said the true financial condition of the refineries became clear almost immediately after a detailed operational review.
“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 declared.
He explained that NNPC was feeding crude oil cargoes into the refineries monthly, yet utilisation hovered between 50 and 55 per cent, resulting in severe value erosion.
“We were spending a lot of money on operations, a lot of money on contractors. But when you look at the net, we were just leaking away value,” he said.
More worrying, Ojulari said, was the absence of any credible plan to reverse the losses.
“Sometimes you make a loss during investment, but you have a line of sight to recovery. That line of sight was not clear here,” he noted.
This lack of clarity, he said, made continued operations economically unjustifiable.
Ojulari revealed that halting refinery operations was one of the first major decisions taken by his administration.
“We decided to stop the refinery and do a quick check. We planned that if things were lined up, we would reopen and work on them,” he said.
According to him, shutting down the facilities was necessary to prevent further losses while reassessing their viability.
The NNPC chief further disclosed that part of the losses stemmed from the quality of products being produced, citing the Port Harcourt Refinery as an example.
“The crude we were taking into Port Harcourt was producing mid-grade products. When you aggregate their value compared to what you put in, it was a waste,” he said.
Ojulari acknowledged that the decision to halt operations was politically sensitive, given longstanding pressure on NNPC to keep refineries running to ensure fuel supply.
“There were political pressures to keep the refinery product, lots of pressure. But when you have been trained for over 35 years to focus on commerciality and profitability, you can’t sleep with that,” he said.
Nigeria’s refineries have for decades operated far below capacity, at times running at single-digit utilisation or shutting down entirely. This has forced Africa’s largest oil producer to rely heavily on imported refined petroleum products.
Between 2015 and 2023, successive administrations approved multiple rehabilitation contracts worth billions of dollars, yet domestic refining output remained negligible, intensifying public scrutiny of NNPC’s efficiency.
Ojulari’s remarks represent one of the most candid admissions by an NNPC chief executive that continued refinery operations, under existing conditions, were economically unsustainable. The comments underscore a broader shift within NNPC, under the Petroleum Industry Act, toward enforcing commercial discipline, even in politically sensitive areas such as domestic refining.