The Nigerian National Petroleum Company Limited has shut down its four state-owned refineries due to significant financial losses. According to Bayo Ojulari, Group Chief Executive Officer of NNPC, the refineries were operating at a monumental loss to the country, with monthly crude oil supplies yielding only 50-55% utilization rates. This resulted in substantial value erosion, prompting the decision to halt operations and reassess the facilities’ future.
Ojulari stated that despite heavy investment in rehabilitation and maintenance, the refineries failed to achieve sustainable output, with poor product quality and high operating costs contributing to the losses. The shutdown has sparked public debate, with former Vice President Atiku Abubakar advocating for privatization, citing the need to avoid further waste of public funds.
NNPC is exploring partnerships with experienced operators to revive the refineries, with talks underway with a Chinese company. Ojulari emphasized that this move aims to ensure the refineries’ sustainability and commercial viability, rather than selling off national assets. The shutdown marks a significant shift in NNPC’s approach, prioritizing accountability and profitability in its operations.
