The Nigerian National Petroleum Company Limited (NNPC Ltd.) has confirmed the shutdown of Nigeria’s state-owned refineries after internal operational reviews revealed they were running at severe financial losses.
Group Chief Executive Officer, Bayo Ojulari, announced the decision at the Nigeria International Energy Summit (NIES) 2026, stressing that continued operation of the facilities had become economically unsustainable. According to him, assessments showed the refineries were “destroying value” and draining public resources despite years of rehabilitation efforts and significant capital injections. Even with consistent crude oil supply, utilisation levels remained at just 50 to 55 per cent, producing refined products valued lower than the crude oil processed.
Ojulari admitted that previous management strategies placed excessive emphasis on engineering and procurement contracts, while long-term operational efficiency and commercial viability were neglected. He cited the Port Harcourt Refinery as a striking example, noting that despite a $1.5bn rehabilitation project, the plant was shut down in May 2025 after recording monthly operational losses of about ₦500m.
As part of a new direction, NNPC Ltd. is exiting direct management of the refineries under a board-approved strategy. The company is now seeking partnerships with experienced global refinery operators who will take over operations under a commercial framework. Under the plan, NNPC is expected to divest equity stakes to selected partners to ensure they have a financial interest in the performance and profitability of the assets. Industry analysts say the move marks a shift from state-led refinery management to a more private-sector-driven model.
With state-owned refineries offline, Nigeria continues to rely heavily on private refining capacity, particularly the Dangote Petroleum Refinery, to stabilise domestic fuel supply and reduce import dependence.
NNPC has not provided a specific timeline for concluding negotiations with prospective partners or restarting operations at the Warri and Kaduna refineries, but officials confirmed that discussions with potential investors are ongoing.
The shutdown underscores longstanding structural challenges in Nigeria’s downstream oil sector and reinforces calls for deeper reforms to ensure efficiency, accountability, and value creation.
By Juliet Ezeh, Abuja
