Nigeria’s downstream oil sector is under renewed scrutiny as the Nigerian National Petroleum Company (NNPC) struggles with rising debt linked to its idle refineries. The state-owned company reportedly owes ₦8.5 trillion in intra-group liabilities tied to its refining subsidiaries. This huge figure shows how much financial pressure has built up after years of operating refineries that remain inactive. BusinessDay reports that the debt persists despite several attempts to restore the facilities, which still sit idle and produce no revenue.
The Port Harcourt, Warri, and Kaduna refineries have a combined capacity of about 445,000 barrels per day. However, they continue to fall short of expectations. Instead of supplying fuel for domestic use, analysts say the refineries have turned into “financial black holes” for the state. According to BusinessDay, a large portion of the ₦8.5 trillion debt is owed by these subsidiaries, reflecting years of maintenance spending and bailout-style funding that delivered little to no progress.
The impact on the economy is significant. Because the refineries are idle, Nigeria must rely heavily on imported fuel. This dependence pushes up costs and worsens the country’s trade imbalance. BizWatch Nigeria also notes that the circular debt within NNPC is expanding, as funds pumped into these refineries keep growing without any operational output. The continued failure to revive these plants drains resources and highlights deeper structural problems within the downstream sector.
Experts believe that owning refineries is no longer enough to guarantee energy security or financial stability. BusinessDay explains that the refineries “remain largely non-functional despite years of investment and maintenance,” stressing that structural reforms or private partnerships are now urgent. Without strong action, Nigeria risks remaining dependent on fuel imports while NNPC’s liabilities continue to rise.
The NNPC’s challenge is a clear reminder that successful energy operations depend on performance, not simply possession of assets. The coming months will show whether the company can turn these idle refineries into productive facilities or whether they will remain a costly weight on the country’s economy.
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