The Nigerian National Petroleum Company Limited (NNPC) is owed over N30 trillion by its own subsidiaries, with the country's non-functioning state-owned refineries accounting for a massive share of this debt, according to a review of the company's financial statements.
The Port Harcourt Refinery Company Limited owes N4.2 trillion, while the Kaduna Refinery and Petrochemical Company Limited has a debt of N2.3 trillion. The Warri Refinery and Petrochemical Company Limited owes N2.055 trillion . These three refineries are currently shut down, raising serious questions about the financial management within the national oil corporation.
The huge debts are part of a wider pattern of financial obligations across the NNPC group. Other subsidiaries, including NNPC Trading and various power and infrastructure companies, contribute to the total debt of N30.2 trillion as of December 2024. The NNPC stated the amounts were used for funding operations and back charges of expenses .
This financial burden comes after the government spent hundreds of millions of dollars trying to fix the plants. The rehabilitation of the Port Harcourt refinery alone was approved for $1.5 billion . Similar large funding was allocated for the Warri and Kaduna refineries .
Despite this investment, the operational results have been deeply disappointing. The Port Harcourt refinery, which was restarted in November 2024, was shut down again in May 2025 for what the NNPC called planned maintenance and a sustainability assessment . This shutdown came just six months after it reopened, far short of the typical 30-month turnaround maintenance schedule .
The Warri refinery faced a nearly identical fate. It was announced operational in December 2024, only to be shut down again in January 2025 due to safety issues with its equipment . The plant had absorbed $897.6 million in maintenance funding but failed to produce Premium Motor Spirit, commonly known as petrol .
Performance data from the brief period the Port Harcourt refinery was active reveals it was operating well below its capacity. Reports indicate it was running at less than 40% of its installed capacity, falling far short of output claims made by the NNPC at its recommissioning . The national oil company had claimed the facility would deliver millions of litres of various fuels daily, but actual production was much lower .
The constant failures have triggered a significant financial loss for the country. An analysis estimated that the five-month shutdown of the Port Harcourt refinery, from May to October 2025, cost Nigeria over N366.2 billion in lost production of petrol, kerosene, and diesel .
Internally, the NNPC's Group Chief Executive Officer, Bayo Ojulari, acknowledged the refineries were a drain on finances. He stated the company was losing between N300 million and N500 million every month operating the Port Harcourt refinery before halting rehabilitation work . He attributed the poor performance to years of neglect and fundamental structural problems that made profitable operations impossible .
The situation has also attracted legal and investigative scrutiny. A civil group and a team of lawyers have filed a lawsuit against a senior NNPC financial officer, seeking a probe into his role in the alleged mismanagement of funds for the refinery rehabilitation . The Economic and Financial Crimes Commission has also begun an investigation into the rehabilitation process .
In response to the crisis, the NNPC leadership is pursuing a new strategy. The company announced it is seeking technical equity partners with a proven record of operating refineries to help repair and manage the plants . The goal of these partnerships is to high-grade or repurpose the facilities to ensure they can run properly. These agreements are expected to be finalized by mid-2026 .
The company has firmly ruled out selling the Port Harcourt refinery, choosing instead to keep the national asset under government control while bringing in private expertise . This decision followed a detailed review that found a previous attempt to operate the refinery before full rehabilitation was ill-informed and not commercially viable .
The poor state of the public refineries is often contrasted with the potential of private sector projects. Billionaire Aliko Dangote built a 650,000-barrel-per-day refinery with an investment similar to the billions spent over decades on the government-owned plants with no result . Dangote estimated the government may have spent over $18 billion to revamp the three refineries over the years .
The history of Nigeria's refineries is marked by past privatization attempts that were reversed. In 2007, the government of former President Olusegun Obasanjo sold a majority stake in the Port Harcourt and Kaduna refineries. The sale was cancelled by the incoming administration of President Umaru Yar'Adua, a decision that has since been criticized as costly for the nation .
The ongoing problems with the refineries occur alongside a broader national debt concern. Nigeria's public debt has grown sharply, reaching N152.4 trillion by June 2025. The government borrowed N17.36 trillion in just the first ten months of 2025, exceeding its approved budget target . The cost of servicing this debt is high, with the 2025 budget projecting that debt servicing will consume 45% of total government revenue .
For everyday Nigerians, the refinery failures mean the country remains dependent on imported fuel, which is subject to price fluctuations and foreign exchange risks. The government recently approved a 15% tariff on imported fuel to help protect local refiners, a move that is expected to increase pump prices . This decision highlights the economic strain caused by the inability to produce fuel at home.
The future of Nigeria's state-owned refineries now hinges on the success of the proposed private partnerships. Until these plants can operate reliably and profitably, they will remain a symbol of national potential that has yet to be realized.