Abuja: Nigeria’s state‑owned refineries have been officially shut down after internal reviews revealed they were operating at “monumental losses” and destroying value for the country, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has disclosed.
Group Chief Executive Officer, Mr Bashir Ojulari, made the revelation during a Fireside Chat at the ongoing Nigeria International Energy Summit (NIES 2026) in Abuja, where he explained that the decision was unavoidable despite political pressure to keep the facilities running.
“When we came in, refineries were a hot topic. Nigerians were angry, expectations were very high, and we were under extreme pressure. After a thorough review, it was obvious we were burning money,” Ojulari said.
Ojulari noted that crude oil was being supplied monthly, yet utilisation hovered around 50–55 per cent, while operational and contractor costs soared. The net impact, he said, was value destruction with no clear path to profitability.
Further analysis showed the refineries were producing mid‑grade products whose market value did not justify the quality of crude feedstock. “That trajectory would have meant value destruction for the next 30 years. We were not going to do that,” he added.
Ojulari credited the Dangote Refinery with providing critical breathing space for Nigeria’s energy supply, describing its emergence as both timely and strategic. He said NNPC has since strengthened collaboration with Dangote to maximise value delivery while maintaining its statutory role as supplier of last resort and ensuring healthy competition in the downstream market.
The NNPC boss traced the historical failure of Nigeria’s refineries to a structural flaw: excessive focus on financing and EPC (engineering, procurement, and construction) contracts, with little attention to long‑term operational capacity.
“You cannot have financing, EPC, and O&M contracts all extracting value without commitment. That system was structured for extraction, not sustainability,” he said.
Ojulari announced that NNPC would no longer rely on contractors but instead bring in experienced refinery operators as equity partners. Under the plan, such partners would acquire stakes, lead operations, and rebuild local technical capacity.
Discussions are already underway with potential investors, including a major Chinese petrochemical company, with site inspections expected soon.
On crude‑for‑naira policy and product availability, Ojulari assured that NNPC remained committed to stabilising supply. He said pricing would naturally stabilise once supply gaps were closed, stressing that product availability was the company’s top priority.
