Oil and fat containing food items are flushed with nitrogen. Why?

Answer: To keep oxygen away, so that the oils and fats are not oxidised and the food does not become rancid.

When oils and fats are exposed to the oxygen of air for a long time they get oxidised. The oxidised products have a bad smell and taste; this is called rancidity.

Nitrogen is an inert (unreactive) gas. When packets of chips and similar foods are flushed with nitrogen, the air (and so the oxygen) inside the packet is replaced by nitrogen. With no oxygen present, oxidation cannot take place, and the food stays fresh for longer.

Nitrogen itself does not react with the food; it simply prevents oxidation by keeping oxygen out. (Antioxidants are different: they are substances added to the food that are oxidised in place of the fat.)