The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPC Ltd), Bayo Ojulari, has explained that the suspension of operations at Nigeria’s government-owned refineries was based on a hard reality: the facilities had become perpetual financial drains that generated no economic return.

Ojulari made this known while speaking at the Nigeria International Energy Summit (NIES), where he said internal reviews showed the refineries had moved beyond mere inefficiency and had turned into long-term liabilities.

“These refineries were not just underperforming,” he said. “They were destroying value on a daily basis.”

Nigeria has four state-owned refineries with a combined installed capacity of 445,000 barrels per day. While they were originally designed to ensure energy security and cut dependence on imported fuel, the facilities have largely remained dormant, operating at minimal capacity or completely idle for extended periods.

Ojulari noted that continuing to finance the refineries under the existing structure was no longer sustainable.

“You cannot keep investing in an asset that never breaks even,” he said. “There comes a point when you must pause and rethink the entire model.”

Official figures indicate that over ₦11 trillion was spent on turnaround maintenance and rehabilitation of the refineries between 2010 and 2023. Despite these investments, Nigeria still relied heavily on imported refined petroleum products, placing pressure on foreign exchange reserves and distorting the fuel market.

Industry experts recall that the refineries functioned relatively efficiently in the 1980s and 1990s, but performance deteriorated in the 2000s as attention shifted from operational excellence to engineering contracts, operations and maintenance arrangements, and financing-driven solutions. This shift weakened preventive maintenance practices and eroded NNPC’s internal technical capacity.

Ojulari stressed that the core challenge was not funding but a defective operating framework.

“Our focus was on contracts and financing,” he said. “We lost focus on how to run the plants efficiently.”

According to him, suspending refinery operations is a strategic move to halt financial losses while exploring more viable options for the assets. He clarified that the decision does not signal a permanent shutdown.

“This is not abandonment,” Ojulari said. “It is about stopping the waste.”

He also pointed to the emergence of private-sector refining capacity, particularly the Dangote Refinery, as providing breathing room for tough but necessary decisions.

“Regardless of opinions, it is a Nigerian refinery that is functioning,” he said. “That has created space for realism.”

With private refineries now contributing to domestic supply, Ojulari said NNPC is no longer compelled to keep unprofitable facilities running simply to prevent fuel shortages.

Looking ahead, he disclosed that NNPC is seeking equity partnerships with experienced international operators who can bring technical know-how and long-term accountability.

“When partners have skin in the game, behaviour changes,” he said.

Ojulari concluded that the refinery shutdown reflects a new approach grounded in fiscal discipline.

“This is how national wealth is protected,” he said. “Not by denial, but by decisive action.”