Mkpoikana Udoma
Port Harcourt — Nigeria’s downstream petroleum sector was thrown into turmoil at the end of September 2025 as a heated faceoff between the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and the Dangote Petroleum Refinery spiraled into a nationwide strike, sparking fears of crippling fuel shortages.
A government-brokered truce has for now halted a nationwide industrial action that threatened to choke Nigeria’s fuel supply, but the ceasefire is fragile, the grievances run deep, and analysts warn the economy remains exposed.
PENGASSAN announced that it had suspended its strike against Dangote Petroleum Refinery “in the interest of Nigerians and the economy,” but the union kept the option to resume action if management fails to honour commitments reached in talks.
“We have decided to suspend the strike. However, should the management of Dangote Refinery renege on the commitments reached, PENGASSAN will not hesitate to resume the action immediately,” union president Festus Osifo told reporters.
The suspension followed days of escalation that included a National Industrial Court order, defiant union memos, mass picketing and a deadlocked government mediation, a sequence that exposed how quickly labour unrest can cascade into a national energy emergency.
Court order, defiance and deadlocked talks
Midway through the standoff the National Industrial Court of Nigeria, NICN, issued an interim order directing that the strike be halted. PENGASSAN told its members it had not been formally served with the order and initially pressed on.
A high-level mediation convened by federal government in Abuja — attended by the refinery, union representatives, regulators and security officials — ended in deadlock. Government ministries including Labour and Finance, and the Office of the National Security Adviser, were drawn in as the dispute threatened fuel flows and public order. Another meeting was scheduled; the talks that followed eventually yielded the conditional suspension.
What escalated: PENGASSAN’s grievance
PENGASSAN’s action began with a forceful allegation: the union claimed Dangote had dismissed more than 800 Nigerian workers after they organised with the union and had replaced them with thousands of foreign nationals — allegations the union described as “slave-labour practices.”
“This move not only undermines the livelihoods of our citizens but also raises serious concerns about the integrity of labour practices and compliance with Nigerian labour laws,” Comrade Lumumba Ighótemu Okugbawa, PENGASSAN’s general secretary, said in the union’s statement.
The union warned it would pursue legal and industrial action, calling for immediate reinstatement of affected staff and protection for Nigerian workers.
Dangote’s rebuttal: ‘lies’, ‘sabotage’ and national risk
Dangote Petroleum Refinery strongly rejected PENGASSAN’s claims. In a robust management statement the company described the union’s directive to cut supplies as “lawless” and accused PENGASSAN of peddling falsehoods that risked national welfare.
“These are all lies that have been consistently debunked. Over 3,000 Nigerians continue to work actively in our refinery,” the company said, adding that the reorganisation had affected a “very small number” of employees and was “not arbitrary.”
Dangote warned that the union’s directive, which instructed members to halt crude and gas supplies and withdraw services across branches, amounted to holding “over 230 million Nigerians to ransom” by threatening the flow of petrol, diesel, aviation fuel, kerosene and cooking gas.
Picketing, supply pain and production dents
Union members picketed company offices and regulatory agencies nationwide and directed branches to halt supplies to the refinery. The disruption immediately reverberated across the supply chain: marketers warned of looming shortages, transport operators sounded alarms, and observers reported that crude output dipped amid the disruption.
Government sources said output fell by roughly 16 percent at the height of the dispute — a figure officials used to press for an urgent resolution.
SEE’s warning: a sector on a knife-edge
The Society of Energy Editors, SEE, in its Q4 2025 outlook, framed the showdown as a systemic risk rather than an isolated labour dispute.
SEE, a professional body for the most senior oil and gas journalists in Nigeria, underscored that Dangote Refinery supplies roughly 60 percent of Nigeria’s refined products and warned of steep macroeconomic consequences if the shutdown had persisted.
SEE cautioned that fuel shortages could emerge within a week, forcing expensive imports. Pump prices, it said, could spike to between N1,300 and N1,500 per litre if the subsidy regime collapsed. “The country also risked foreign-exchange losses of $5–$7 billion annually from resumed imports, putting additional pressure on the naira. Inflation, which had been easing, could swing back toward 25 percent.”
The editors also warned that government crude-supply deals with Dangote and the subsidy architecture itself could unravel.
“The single most critical factor for Q4 stability is the resolution of the Dangote–PENGASSAN dispute. A prolonged standoff guarantees a national crisis,” SEE warned.
Larger Picture: The Battle for Industrial Harmony
The Dangote–PENGASSAN saga underscores the fragile state of industrial harmony in Nigeria’s energy sector. With oil and gas unions historically wielding enormous influence, any attempt to sideline them often triggers broader unrest.
The crisis also raises critical questions about the role of private sector mega-projects in a country where labour unions are not just advocates for workers, but also watchdogs of national economic justice.
As analysts have pointed out, while the refinery promises to cut Nigeria’s dependence on imported petroleum products, its success will be hollow if it is built on a foundation of recurring labour unrest. The crisis therefore forces a reckoning: can Nigeria industrialise at scale without undermining the rights of those whose labour makes such projects possible?
Beyond the truce: structural fault lines
The temporary suspension of hostilities bought breathing room, but it did not erase the deeper issues. Analysts and stakeholders say the crisis exposed three structural weaknesses.
First is Nigeria’s over-dependence on a single refinery. With one large refinery supplying most domestic demand, labour or technical disruptions ripple nationally.
Second is the fragility of labour-management relations. Mutual mistrust — evidenced by PENGASSAN’s refusal to immediately accept a court order and Dangote’s forceful public denunciations — means any spark can blow up into a wider confrontation.
Third is the gap in policy and supply resilience. The country still lacks redundant refining capacity and rapid contingency import mechanisms that can be activated without fiscal shock.
Calls for reform range from stronger statutory labour-relations frameworks and clearer dispute-resolution mechanisms to faster diversification of refining capacity and stepped-up stakeholder engagement across government, operators and unions.
What happens next
The truce includes commitments to reassign affected workers within the Dangote Group without loss of pay, negotiators said, but PENGASSAN declined to sign the final communique immediately, insisting some clauses remained unresolved. Another government-facilitated meeting has been scheduled to secure a lasting settlement.
If management honours the agreements and the follow-up talks yield verifiable outcomes, the suspension could harden into peace. If not, the union has warned it will resume action — a prospect that would quickly revive supply concerns and re-ignite the SEE’s worst-case scenarios.
Conclusion
The Dangote–PENGASSAN episode is not just a labour drama; it is a stress test for Nigeria’s energy governance. It shows how labour disputes, corporate restructurings and a narrow industrial base can combine to imperil national supply and economic stability.
For now, pumps remain open and markets calm, but the fragility of the truce, the unresolved grievances and SEE’s stark economic projections leave a clear refrain: unless the parties convert this pause into durable, trust-based reform, Nigeria’s energy sector will remain precariously balanced between progress and crisis.
This article was originally posted at sweetcrudereports.com
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