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Nothing justifies the call for the sale of Nigeria’s petroleum refineries than the confession by the Group Chief Executive Officer (GCEO) of the Nigeria National Petroleum Corporation Limited, Bayo Ojulari, that the nation’s prime refinery in Port Harcourt lost between $300 million and $500 million monthly during the brief period that it operated. This was after some $1.5 billion had been spent on the rehabilitation exercise. NNPCL had, in a fanfare, announced that the refinery had been fixed. Those who argued against the announcement were shouted down.
Ojulari’s claims, made during a meeting in August 2025 with the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have fueled debates about the viability of the refineries, the effectiveness of the numerous rehabilitation exercises, and the broader challenges facing state-owned refineries. Recall that NNPCL announced in May 2025 the shutdown of the refinery, citing the need for further maintenance as the reason. The other finger, which it pointed at the need for sustainability assessment, further raised doubts about the sustainability of the refineries. NNPCL’s action in May came just six months after the celebrated reopening, thus raising serious questions about the quality of the rehabilitation work and the transparency of the process.
The sustainability question hanging on the refineries is a pointer to the believe, in so many quarters, that the continued injection of money into the refineries, in the name of rehabilitation, is simply a way to fund Nigeria’s corruption enterprise through which some persons become moneybags overnight, and, or, through which the political patronage system and oiling of some political wheels are sustained. Otherwise, Ojulari’s claim of losing between $300 million and $500 million monthly ought to have triggered outrage, inspired a widespread investigation, and led to arrests and prosecution. But this is Nigeria, a country where state corporations fund corruption with fanfare.
Recall that Aliko Dangote, President of Dangote Refinery, had expressed scepticism about the ability of the refineries to return to functional mode ever again. He cited their prolonged neglect as one of the reasons for his doubts. Before him, Ibe Kachikwu, who functioned as GMD of NNPC in 2015, had voted for the scrapping of the refineries. Kachikwu had told journalists then that efforts to rehabilitate the refineries, beginning with the one in Port Harcourt, which led to the engagement of the original equipment manufacturers (OEMs), failed to yield any results. Reason? The technology adopted in building the refineries had become outdated and rendered them moribund. He recommended scrapping them and building modular refineries. But the government that he served thrashed the suggestion. It is not impossible that those who insisted that the refineries could be rehabilitated had their minds set on the funds that would be wasted in the exercise.
One of the key structural challenges facing the refineries is their age. Another is their complexities. The old Port Harcourt refinery was built in 1965. The one at Warri was built in 1978; Kaduna was built in 1980, while the one at Eleme was built in 1989. This means that the oldest of the refineries is 60 years old. These facilities rely on technology that is already outdated, which makes it difficult and costly to maintain. Ojulari had even noted that attempts to introduce new technologies during the rehabilitation process were unsuccessful because their dilapidated state made integration challenging. Technology is not a stagnant reality. It evolves. Anyone forcing the thinking that a refinery built in 1968 can operate effectively in 2025, using the same old technology for which spares may no longer be available in the market is effectively pulling wool over the eyes of everyone just to oil an enterprise.
This may be the reason the $1.5 billion allegedly spent on the rehabilitation exercise needs questioning, as it is clothed in shadowy gowns. It goes the very same route as previous Turn Around Maintenance (TAM) exercises, which only turned the personal finances and economic status of a few Nigerians around. This has also left the majority of the population suffering the pain of the high cost of petroleum products because the vision of the government in building the refineries was to ensure energy self-sufficiency and the elimination of dependence on imported petroleum products, which, together, have an impact on pricing.
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The failure of the refineries has significant political and economic implications for Nigeria. Politically, it has fueled public distrust in the government and the NNPCL. The initial fanfare surrounding the refinery’s reopening raised expectations that were quickly dashed, leading to accusations of mismanagement and calls for accountability. Ojulari himself has faced intense scrutiny, with calls for his removal. He has claimed that the NNPCL is “under attack” from vested interests opposed to his reform efforts. This suggests a complex web of political pressures over NNPCL and resistance to change.
Economically, it has perpetuated Nigeria’s reliance on imported petroleum products, which drains foreign exchange reserves. The monthly losses of $300 million to $500 million, reported by Ojulari, represent a significant financial burden on the NNPCL and, by extension, the economy. These losses could have been redirected to other critical areas, such as infrastructure development or social services. Moreover, the shutdown has disrupted the economic benefits observed during the refinery’s brief operational period and frustrated local communities and stakeholders.
However, the focus has shifted to the debate on the privatisation of the refineries. Ojulari had earlier suggested selling the Port Harcourt, Warri, and Kaduna refineries. He later backed down and stated that the NNPCL was committed to retaining and rehabilitating the Port Harcourt facility. His shift in stance reflects the political sensitivity of the privatisation of the refineries, which has historically been opposed by unions and certain powerful political cartels that see the refineries not only as national assets but as conduits to fund personal estates. This is underscored by the 2007 reversal, by President Umaru Yar’Adua, of the sale of Port Harcourt and Kaduna refineries to a consortium. The action was blamed on pressure from petroleum unions. However, the reversal was against national interest and the need to implement strategic reforms that would free the refineries from union and political interests, and make them serve the true purpose of their being.
To free Nigeria from this perpetual cycle of financial waste in refinery rehabilitation, there is a need for a comprehensive overhaul of the country’s energy policy. This includes addressing pipeline vandalism, crude oil theft, and infrastructure decay, all of which have hampered the operations of NNPCL. These can, however, be achieved with the privatisation of the refineries, as it has become evidently clear, with the waste of $1.5 billion and a monthly loss of between $300 million and $500 million, that the refineries will remain conduits to fund corruption so long as they remain in government hands. No private investor will welcome such a loss like NNPCL has done. None will burn $1.5 billion on facility rehabilitation and not achieve the desired result.
Ojulari’s leadership may have shown some progress with crude oil production increasing from 1.6 million bpd to 1.9 million bpd since his appointment. However, sustaining these gains and translating them into operational refineries will require sustained political will, transparency, and investment, which are achievable through private ownership and operation of the refineries.
