Mounting debt, weak utilisation and repeated shutdowns raise fresh doubts over recovery despite assurances from new NNPC leadership…..
The Nigerian National Petroleum Company Limited committed an estimated N13.2tn to the country’s three state-owned refineries between 2023 and 2024, largely to finance turnaround maintenance, operational costs and bank charges, even as the facilities continued to post significant losses and struggled to operate at commercially viable levels.
The disclosure comes amid renewed scrutiny of the performance of the Port Harcourt, Warri and Kaduna refineries, following public comments by the Group Chief Executive Officer of NNPC, Bayo Ojulari, who described the plants as a major financial burden on the country.
Ojulari spoke in Abuja during a fireside chat titled “Securing Nigeria’s Energy Future” at the Nigeria International Energy Summit 2026, where he offered rare insight into the commercial realities of the long-troubled refining assets. He acknowledged that the refineries had been operating at what he termed a monumental loss.
He said, “The first thing that became clear, and I want to say this very clearly, is that we were running at a monumental loss to Nigeria. We were just wasting money. I can say that confidently now.”
Financial records from NNPC’s 2024 statements show that the combined obligations of the three refineries to the national oil company stood at N4.52tn in 2023 and rose sharply to N8.67tn by the end of 2024, bringing total exposure over the two-year period to roughly N13.2tn.
The company explained that the rising balances reflected continued funding of refinery operations and bank-related charges, particularly during the tenure of the former GCEO, Mele Kyari, when efforts were intensified to revive the long-dormant facilities.
However, Ojulari indicated that those revival efforts failed to deliver meaningful results, noting that the refineries continued to drain resources despite heavy investment.
Public frustration over the state of the refineries, he said, was understandable given the enormous sums spent on rehabilitation over the years and the expectation that local refining would improve fuel availability and reduce dependence on imports.
A breakdown of the figures shows that the Port Harcourt refinery received the largest portion of funding. Its liabilities to NNPC rose from about N1.99tn in 2023 to N4.22tn in 2024, representing an increase of more than N2.22tn within one year. Despite this level of investment, the refinery reported no receivables in either year, indicating that the funds deployed for maintenance and operations were not matched by revenue generation.
At the Warri refinery, obligations increased from about N1.17tn in 2023 to N2.06tn in 2024. While the facility recorded N81.64bn owed to it by other NNPC entities in 2023, suggesting limited internal activity, this figure disappeared completely in 2024 as operational costs rose and income remained negligible.
The Kaduna refinery, long affected by operational and security challenges, saw its debt grow from about N1.36tn in 2023 to N2.39tn in 2024, reflecting continued spending on maintenance, staffing, security and finance costs during its turnaround maintenance phase.
Ojulari further disclosed that crude oil was supplied to the refineries consistently, but performance remained weak. According to him, utilisation levels averaged between 50 and 55 percent, far below the threshold required for sustainable operations.
“We were pumping crude into the refineries every month. But utilisation was around 50 to 55 percent. We were spending a lot of money on operations and contractors. But when you look at the net, we were just leaking away value,” he said.
He added that one of the most troubling issues for the new management team was the absence of a clear path to recovery despite the scale of financial commitment.
“Sometimes you make a loss during investment, but you have a line of sight to recovery. That line of sight was not clear here. 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.
The gravity of the losses, he explained, prompted one of the earliest decisions of his leadership, halting refinery operations to prevent further erosion of value and allow for a comprehensive reassessment of the assets.
As of the end of 2024, the three refineries still carried outstanding obligations of N8.67tn to NNPC, underscoring the heavy financial weight of the turnaround maintenance programme and the challenge of translating years of spending into viable refining operations.
Within the two-year period, N4.5tn was committed in 2023 and N8.6tn in 2024, with the funds classified as debt owed to NNPC by its refinery subsidiaries. The figures highlight the continued status of the refineries as cost centres dependent on the company’s balance sheet rather than self-sustaining commercial entities.
You’ll recall that the 60,000-barrels-per-day Port Harcourt refinery resumed operations in November 2024 after years of inactivity. At the time, former GCEO Mele Kyari said the rehabilitated facility was operating at about 70 percent of installed capacity.
He disclosed that diesel and fuel oil would account for the highest output, with daily production of about 1.5 million litres and 2.1 million litres respectively. This was expected to be followed by straight-run gasoline blended into about 1.4 million litres of premium motor spirit, 900,000 litres of kerosene and 2.1 million litres of low-pour fuel oil. The refinery was projected to release roughly 200 trucks of petrol into the domestic market daily.
However, the facility was shut down again in May 2024, a month after Kyari left office.
The Warri refinery, which was declared operational in December, also went dormant barely a month after its reopening. Promises to revive the Kaduna refinery and the new Port Harcourt refinery complex were not fulfilled before Kyari’s exit following a directive from President Bola Tinubu.
Last year, President of the Dangote Group, Aliko Dangote, said the government-owned refineries might never function again despite about $18bn spent on rehabilitation. Former President Olusegun Obasanjo also expressed similar doubts, questioning why continued attempts were being made to revive facilities widely believed to be beyond recovery.
The organised private sector has since urged NNPC to consider selling the refineries rather than maintaining them as a drain on public resources.
But Ojulari dismissed the suggestion, maintaining that the refineries would eventually return to operation.
For now, attention remains fixed on the future of the three state-owned refineries as Nigerians await tangible results under the new NNPC leadership.
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