The Nigerian National Petroleum Company Limited (NNPC Ltd.) has halted operations at Nigeria’s state-owned oil refineries after internal assessments showed the facilities were generating significant financial losses and destroying national value, according to Group Chief Executive Officer Bashir Bayo Ojulari.
NNPC’s decision was disclosed on Thursday, February 5, 2026, during a Fireside Chat on Securing Nigeria’s Energy Future at the Nigeria International Energy Summit (NIES 2026) in Abuja.
“After a detailed review, it became clear that we were simply wasting money,” Ojulari said, explaining why the refineries were shut down following months of public scrutiny over continued investment with little operational return.
Why the Refineries Were Shut Down
NNPC’s internal technical and commercial review revealed that the state-owned refineries — in Port Harcourt, Warri, and Kaduna — were operating at around 50–55 per cent capacity utilisation despite a steady supply of crude, leading to persistent losses and value erosion.
Ojulari said the losses were compounded by rising operating costs and escalating contractor expenses, which made continued operations economically unjustifiable.
“When we looked at the net outcome, we were leaking value with no clear line of sight to profitability,” he added, emphasising that running the refineries under the existing structure would continue to destroy value.
Nigeria’s state-owned refineries have long struggled with chronic underperformance, often operating below installed capacity despite years of rehabilitation efforts and significant public spending. This persistent inefficiency has forced the country to rely heavily on imported refined petroleum products.
Reactions and Future Plans
Ojulari acknowledged that the decision to halt the refineries was politically sensitive, noting that past administrations often faced pressure to keep the facilities running to maintain domestic product supply.
“There were political pressures to keep the refinery product — lots of pressure — but when you focus on commerciality and profitability, you can’t sustain that,” he said.
NNPC is now exploring new strategic options, including equity partnerships with experienced global refinery operators, to restructure and reposition the refineries on a more sustainable, business-oriented footing.
Some industry observers have noted that the existence of efficient private refineries like the Dangote Refinery has given NNPC room to reassess its approach and prioritise value creation over politically driven operations.
The closure underscores ongoing challenges in Nigeria’s downstream oil sector, where high investment costs, technical inefficiencies and low utilisation rates have hampered domestic refining capacity. By stopping operations and reassessing strategy, NNPC aims to reduce drain on public resources and seek more commercially viable models for future refinery operations.
Analysts say the move highlights broader structural issues in how state-owned assets are managed, and could spur further policy discussions on public-private partnerships, divestment, or full privatisation to attract capital and expertise needed for sustainable refinery operations.