Operations at Dangote’s $20 billion refinery face disruptions amid oil workers’ union protests

Nigeria’s $20 billion Dangote Refinery has come to a halt after the oil workers’ union launched an industrial action protesting the alleged dismissal of more than 800 employees.

• Nigeria's Dangote Refinery has halted operations due to a strike by PENGASSAN over the alleged dismissal of 800 workers.
• The strike has disrupted the refinery's refining processes and affected its fertilizer plant operations.
• Management labeled the strike as economic sabotage, while PENGASSAN defended it on grounds of labor rights violations.
• The shutdown raises concerns about stability in Nigeria's refining sector and the potential supply shortfalls.

Nigeria’s largest oil refinery, owned by Aliko Dangote, has been forced into a standstill after the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) moved to shut down operations on Sunday in protest against the alleged dismissal of over 800 workers.

The stoppage marks the first major disruption at Africa’s largest refinery since it began operations earlier this year, raising concerns over stability in the country’s refining sector.

In its update, PENGASSAN said the Dangote Refinery plant has been “100 percent shut down,” while the fertilizer plant’s second train has also been halted, with the first train operating at 60 percent capacity.

The union added that diesel production remains ongoing but warned that crude and gas supply to the refinery has already been disrupted.

The union claimed to have extended the action to “all oil installations nationwide,” although Dangote Industries has yet to confirm the refinery’s operational status.

Crisis deepens amid accusations of sabotage

The refinery management, in a statement on Saturday, had branded the shutdown directive as “economic sabotage" while regulators are urging calm to prevent a prolonged disruption. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has called on both sides to return to the negotiating table.

At the center of the standoff is the reported dismissal of more than 800 staff, many of them reportedly linked to union membership.

Dangote Refinery dismissed PENGASSAN’s claims as false, stressing only a “very small number” of staff were discharged during an internal reorganisation.

It rejected accusations of replacing Nigerians with foreigners, branding the union’s retaliation terror tactics that endanger essential petroleum supplies nationwide.

PENGASSAN argues the refinery’s decision undermines workers’ rights, while Dangote Industries frames the move as part of internal restructuring. The dispute risks derailing Dangote’s ambitious plans to transform Nigeria’s fuel distribution network.

The refinery’s troubles come just weeks after a favorable court ruling in its battle with fuel truck unions. Abuja’s National Industrial Court had restrained the Nigeria Union of Petroleum and Natural Gas Workers and the Direct Trucking Company Drivers Association from staging strikes or blocking distribution routes.

The injunction also barred them from interfering with the refinery’s operations or those of its partners, MRS Oil Nigeria Plc and MRS Oil and Gas Company Ltd.

With regulatory clearance secured to distribute refined products directly, the refinery is positioning itself to challenge entrenched players in Nigeria’s downstream sector.

But industrial unrest now threatens to slow its expansion plans, undermining efforts to boost domestic supply and capture export markets.

Wider implications for Nigeria’s oil sector

The standoff highlights persistent tensions between labour and management in Nigeria’s petroleum sector, where unions wield significant influence.

Analysts warn that the disruption could ripple across supply chains, from crude deliveries to gas processing and fertiliser exports.

For Aliko Dangote, the world’s richest Black businessman, the dispute adds to the challenges of launching Africa’s largest refinery project in a turbulent economic climate.

With the refinery still in its early production stages, further unrest could dent investor confidence and slow the government’s hopes of reducing reliance on imported fuels.

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