The Nigerian National Petroleum Company Limited (NNPC Ltd.) has disclosed that Nigeria’s state-owned refineries were shut down after internal assessments revealed that they were operating at severe losses and eroding national value.
Speaking at a fireside session titled Securing Nigeria’s Energy Future during the Nigeria International Energy Summit (NIES) 2026 in Abuja, NNPC Group Chief Executive Officer, Bashir Ojulari, said the decision followed a comprehensive review triggered by public outrage over years of heavy spending and weak refinery performance.
Ojulari said the refineries quickly emerged as a major concern when his leadership team assumed office, with public expectations running high and pressure mounting to justify continued operations.
According to him, a detailed examination showed that crude oil was being supplied to the facilities every month, yet utilisation rates remained between 50% and 55%, while operating and contractor costs continued to rise.
“When we assessed the numbers, it became clear that the system was bleeding money with no realistic path to profitability,” he said.
Ojulari, who has an upstream oil background, explained that his team had to rapidly adapt to the complexities of downstream operations, describing the learning process as steep but necessary.
Further analysis showed that the refineries were producing mid-grade petroleum products that did not justify the quality or cost of crude inputs, a trajectory Ojulari said would have resulted in decades of value destruction.
Despite political pressure to keep the plants running, NNPC opted to halt operations and reassess its strategy.
“That model would have destroyed value for the next 30 years. We had to stop it,” he said.
Ojulari credited the Dangote Refinery with easing Nigeria’s energy supply challenges, describing its entry into the market as both timely and strategic.
“Regardless of opinions, the Dangote Refinery is operational, it is local, and it gives Nigeria the breathing space to make better decisions,” he said.
He added that NNPC has since deepened collaboration with the Dangote Refinery while maintaining its role as supplier of last resort and promoting competition in the downstream sector.
Explaining the historical failures of Nigeria’s refineries, Ojulari identified structural weaknesses, particularly an overemphasis on financing and EPC contracts, with insufficient focus on long-term operations and maintenance.
“You cannot have financing, EPC, and O&M arrangements all extracting value without accountability. That framework was built for extraction, not sustainability,” he said.
Under NNPC’s new strategy, experienced refinery operators will be brought in as equity partners rather than contractors. These partners will take ownership stakes, manage operations, and support local capacity development.
“We are not selling Nigeria. We are selectively diluting equity to build refineries that function as commercially viable businesses,” Ojulari said.
He disclosed that talks are ongoing with prospective investors, including a major Chinese petrochemical firm, with site visits expected soon.
On domestic crude supply and the crude-for-naira initiative, Ojulari reaffirmed NNPC’s commitment to ensuring product availability, noting that pricing pressures would ease naturally once supply constraints are addressed.
 has disclosed that Nigeria’s state-owned refineries were shut down after internal assessments revealed that they were operating at severe losses and eroding national value.){kind=link}