Ojulari Discloses why NNPC Kept Operating State Refineries Despite Heavy Losses
- NNPC GCEO Bayo Ojulari said political pressure was applied to keep refineries operating despite losses
- He explained that a management review showed that the continued operation of the refineries was not unsustainable
- Speaking at NIES 2026, he said low utilisation rates and high operating costs led to continuous value losses
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Group Chief Executive Officer of the Nigerian National Petroleum Company (NNPC) Limited, Bayo Ojulari, has said intense political pressure was mounted to keep Nigeria’s state-owned refineries operating, despite internal findings that the facilities were recording heavy financial losses.
Ojulari disclosed this on Wednesday, February 4, 2026, in Abuja during a fireside chat titled Securing Nigeria’s Energy Future at the Nigeria International Energy Summit (NIES) 2026, Daily Trust reported.
Source: UGC
According to him, the pressure persisted even as management reviews showed that refinery operations were eroding national value and running at what he described as monumental losses.
The NNPC chief said public frustration over the refineries was understandable, considering the huge investments committed to their rehabilitation 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,” Ojulari said.
NNPC: Ojulari says he rejected political pressure
He added that there were strong political demands to continue refinery operations, but insisted that his professional background made it difficult to support activities that lacked commercial viability.
Ojulari explained that after assuming office, his management team conducted a diagnostic review to determine the true commercial status of the refineries.
The review, he said, revealed an unsustainable business model that offered no clear path to recovery.
“The first thing that became clear is that we were running at a monumental loss to Nigeria. We were just wasting money,” he stated.
NNPC: Review discloses value leakages – Ojulari
According to him, NNPC was allocating crude oil cargoes to the refineries monthly, yet utilisation rates averaged between 50 and 55 per cent, while operating and contracting costs remained high.
He said this combination resulted in continuous value leakage, with spending on operations outweighing the returns from refined products.
Ojulari noted that although losses can occur during investment phases, there must be a clear line of sight to recovery, which he said was absent in this case.
As a result, he said the first major decision taken by his administration was to halt refinery operations and subject the assets to a rapid technical and commercial reassessment.
The NNPC GCEO also cited product quality issues, using the Port Harcourt Refinery as an example. According to him, crude processed at the facility was yielding mid-grade products whose combined value did not justify the input costs, describing the outcome as uneconomical.
Source: Twitter
Why govt must rehabilitate refineries – PETROAN
Legit.ng earlier reported that the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) advised the federal government rehabilitate the moribund state-owned refineries — the Warri, Kaduna and Port Harcourt Petroleum Refineries.
The association’s National Public Relations Officer, Dr Joseph Obele, noted that these three refineries were abandoned for several years, despite their importance to the country’s energy security and economy.
Obele said the brief return of operations at the Port Harcourt Refinery had a positive impact on surrounding communities, with increased business activities and employment opportunities, particularly for youths, recorded within the first six months.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
