- Oil unions order crude supply halt over labour dispute
- Dangote warns of fuel scarcity, economic disruption
LAGOS, NIGERIA – A confrontation between Nigeria’s Dangote Refinery and oil workers’ unions is threatening to upend recent stability in the country’s fuel supply, with warnings of nationwide economic fallout.
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) on Friday directed members to cut crude oil supplies and suspend vessel loading operations to Africa’s largest refinery. The order came after allegations that Dangote Refinery dismissed 800 workers for joining industry unions and replaced them with foreign staff.
In a sharp response Saturday night, the 650,000-barrels-per-day facility said the move could plunge Nigeria back into fuel shortages, warning of heavy losses to government revenue.
“The products that would be disrupted and stopped include but are not limited to aviation fuel, petrol, kerosene, diesel and cooking gas – all products that are used and required by all stripes of Nigerians and persons living in Nigeria, whether high and mighty or lowly and ordinary,” the refinery said.
Union demands and refinery’s denial
PENGASSAN, alongside the National Union of Petroleum and Natural Gas Workers (NUPENG), insisted Dangote must reinstate the sacked employees or face an industry-wide strike.
The unions’ demands have raised the stakes for a country that only recently stabilised its fuel supply after years of shortages caused by underperforming state-owned refineries and repeated labour disruptions.
Dangote Refinery denied firing staff for joining unions, saying “only a small number were affected” in a restructuring exercise. The refinery also reversed its earlier decision to halt the naira sale of petrol, following interventions by Nigeria’s Naira-for-Crude Transaction Committee.
Economic ripple effects
Economists warned of far-reaching consequences if the union directive is enforced. Dr Muda Yusuf, Chief Executive of the Lagos-based Centre for the Promotion of Private Enterprises, told Allen Dreyfus on Sunday that disruption of Dangote’s output could cripple Nigeria’s logistics-dependent economy.
“If this action becomes prolonged, it will disrupt the fuel distribution system because Dangote Refinery is a major supplier of petroleum products,” Yusuf said.
“This could lead to scarcity, and of course, scarcity could mean that a lot of economic activities will be disrupted. This is an economy whose logistics are over 90 per cent dependent on road transportation.”
Yusuf also cautioned that the dispute risks damaging investor confidence at a time when Nigeria is pushing reforms to attract foreign capital. “This is the biggest investment in Nigeria and perhaps Africa today,” he said, describing the unions’ move as “entirely disproportionate.”
While acknowledging there may be issues within Dangote’s operations, Yusuf urged both sides to resolve their differences through negotiation rather than cutting vital energy supplies.
Nigeria, one of the world’s leading oil producers, has long grappled with refining shortfalls that forced it to import much of its fuel. The $20 billion Dangote Refinery, which began full operations this year, had offered a rare period of stability. That progress is now at risk as the country confronts a dispute that could reverberate far beyond its borders.
