Ojulari, NNPCL boss, links refinery shutdown to foreign exchange stability

…Says, continued operation of loss-making refineries contributed to FX stress

The shutdown of Nigeria’s state-owned refineries by the Nigerian National Petroleum Company (NNPC) Limited is not just an operational decision, it is a strategic move to protect the country’s foreign exchange position. Bayo Ojulari, Group chief executive officer, NNPCL, has said.

Speaking at the Nigeria International Energy Summit (NIES), Ojulari said that the continued operation of loss-making refineries contributed directly to Nigeria’s foreign exchange stress.

“When you spend trillions rehabilitating refineries that do not work, and then still import fuel, you are hitting your foreign reserves twice,” he said.

Nigeria’s dependence on imported refined products has long been a major drain on its foreign exchange reserves. Despite being Africa’s largest crude oil producer, the country spent billions of dollars annually importing petrol, diesel, and aviation fuel due to the failure of its refineries.

Ojulari also said that the internal review that led to the shutdown revealed that NNPC was effectively subsidising inefficiency.

“We were using scarce resources to sustain assets that were not delivering value,” he said. “That is not sustainable for the economy.”

Between 2010 and 2023, government spending on refinery rehabilitation exceeded ₦11 trillion. Yet domestic fuel supply remained heavily import-dependent, exposing Nigeria to global price volatility and supply disruptions.

Read also: Why Nigeria’s refineries failed – Bayo Ojulari

Experts are of the view that Nigeria’s refineries operated efficiently through the 1980s and much of the 1990s, but performance declined in the 2000s as institutional focus shifted away from operational excellence toward EPC contracting, O&M structures, and financing-driven interventions.

This transition weakened preventive maintenance culture, increased reliance on turnaround maintenance cycles that proved more commercially attractive to external parties, and contributed to the gradual erosion of in-house operational capacity within NNPC.

Ojulari explained that the shutdown was part of a broader effort to impose commercial discipline across NNPC’s operations.

“You cannot talk about economic reform and continue doing the same things,” he said.

He noted that the emergence of the Dangote Refinery has significantly altered the landscape.

“Whether you love Dangote or not, thank God it is working in Nigeria,” he said. “It reduces pressure on foreign exchange and gives us room to rethink.”

With private refineries beginning to meet domestic demand, NNPC can afford to pause and restructure its own assets rather than rushing into costly rehabilitation cycles.

Ojulari also addressed concerns that the shutdown could undermine energy security.

“Energy security is not about owning assets,” he said. “It is about having reliable supply.”

He argued that reliable supply could come from a mix of private-sector refining, imports when necessary, and restructured public assets operated efficiently.

Under the new strategy, NNPC plans to attract global operators with proven track records to take equity positions in the refineries.

“We are not selling Nigeria,” Ojulari said. “We are strengthening Nigeria.”

Ojulari said early engagement with international firms has been encouraging, with inspections already taking place.

“This is about sustainability,” he said. “Not slogans.”