The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has clarified that Nigeria’s refineries were not shut down because they were completely broken, but because they had become uneconomical to operate.

Speaking on Channels Television’s Politics Today on Tuesday, PENGASSAN President Festus Osifo said the facilities were functional but failed to deliver value compared to the cost of crude supplied to them.

According to him, crude worth around $10 million often produced refined products valued at less than that amount, meaning the plants consistently operated at a loss.

“The equipment was running, but not efficiently,” Osifo explained. “In engineering, there’s a difference between a system that works and one that works optimally. The problem was that the output wasn’t matching the input, so the losses kept piling up.”

Osifo further disclosed that during a recent engagement with the new Group Chief Executive Officer of NNPC Limited, management confirmed the shutdown was a strategic move. The decision, he said, was aimed at halting the losses and creating room for a review of the refineries’ operations to restore them to efficiency.

He stressed that contrary to public belief, the plants were not abandoned because they were irreparable, but because the material balance—the value of what was coming out versus what was going in—was unfavorable.

The PENGASSAN boss noted that the association supports efforts to reassess and reposition the refineries, describing it as a necessary step toward making them profitable again.