Nigeria’s Dormant Refineries Consume ₦13tn, NNPC Admits Waste

Nigeria’s state-owned refineries have cost the nation around ₦13 trillion in public funds, yet they offer very little in terms of operational output. The Nigerian National Petroleum Company Limited (NNPCL) has admitted this, sparking fresh discussions about years of investment in old, mostly non-working facilities.

At the Nigeria International Energy Summit in Abuja last week, NNPCL’s Group Chief Executive Officer Bayo Ojulari recognized that ongoing spending on poorly functioning refineries is a waste of limited resources.

“We were just wasting money,” Ojulari told attendees, highlighting the financial impracticality of maintaining operations under the current setup. “The refineries were leaking value, and there was no clear path to profitability.”

Massive Spend, Minimal Output

Nigeria’s four government-owned refineries, located in Port Harcourt, Warri, and Kaduna, have a total capacity of about 445,000 barrels per day.

However, for years, these facilities have operated well below capacity or have been completely inactive. This situation forces the country to depend heavily on imported petrol and other refined products.

The ₦13 trillion figure represents total spending on rehabilitation efforts, operating costs, subcontractor payments, and other expenses tied to attempts to revive the plants. These efforts until recently failed to yield consistent production.

This waste of funds has drawn significant criticism in both political and economic circles.

Political Pushback and Public Debate

NNPCL’s acknowledgment has sparked renewed debate over how Nigeria’s refining assets are managed. Former Vice President Atiku Abubakar called this admission a confirmation of his long-standing push for privatization.

“Pouring public funds into dead-end refineries is economically unjustifiable,” Atiku said in a statement, emphasizing that billions have been spent without any meaningful outcomes. “Paying billions in salaries to facilities that produce not a single liter of petrol does not serve the national interest.”

Opposition lawmakers and energy analysts have also reacted to this disclosure, arguing that state-run facilities have become “monuments to waste” and burden public finances.

Some point out that the upcoming commissioning of the Dangote Refinery, a privately developed and operated facility, underscores the significant performance gap between private and state-owned projects.

Shifting Strategy at NNPCL

In response to the ongoing losses and operational failures, Ojulari announced that NNPCL’s board has approved a new strategy.

This may involve partnering with experienced equity investors who have proven operational success, moving away from the previous short-term contractor model.

“We are not selling Nigeria,” he said, “but we are open to selling some equity to bring in operators who have a stake and can run these assets sustainably.”

NNPCL’s shift comes after decades of so-called Turn Around Maintenance (TAM) contracts and rehabilitation programs that critics argue resulted in repeated spending without developing a competitive domestic refining industry.

Broader Implications

The prolonged issues with the state refineries have wider economic effects. Nigeria continues to pay billions for imported refined products, which strains foreign exchange reserves and leads to occasional fuel price swings.

At the same time, discussions about energy security, private sector involvement, and structural reform have intensified.

As public scrutiny increases, there is growing pressure on regulators, lawmakers, and the executive branch to find clearer paths toward sustainability and accountability in Nigeria’s downstream petroleum sector.