When Africa’s biggest refinery meets Nigeria’s unions: inside the Dangote–PENGASSAN showdown

On a tidy industrial strip in the Lekki Free Zone, the containers, towers and pipelines of the Dangote Petroleum Refinery — a $20 billion, 650,000-barrel-a-day giant built to transform West Africa’s fuel landscape — have become the unlikely centre of a rapidly escalating labour and economic crisis. In late September 2025, what began as an industrial reorganisation and a dispute over unionisation spilled into mass dismissals, a union order to cut crude and gas flows, and a company decision to suspend petrol sales in naira — moves that could ripple through households, transport networks and the naira itself.

The refinery everyone bets on — and fears to lose

When it started processing crude in January 2024, Dangote’s refinery was widely hailed as the project that could end Nigeria’s perennial dependence on imported petrol and ease pressure on foreign reserves. A single-train facility with scope to alter regional trade flows, the plant was built with political and economic hopes attached — cheaper local fuel, jobs and currency stability. But even before this week’s crisis, the refinery has faced teething pains: maintenance outages, questions over crude supply and a balancing act between domestic sales and lucrative exports.

The spark: unionisation, dismissals and mutual accusations

The immediate trigger for the current standoff was employees’ move to join the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). According to PENGASSAN, management reacted by “disengaging” unionised staff — a move the union described as unlawful and anti-labour. Dangote’s internal memo, seen by journalists, announced a mass dismissal as part of a “total re-organisation,” and the company later said the move was tied to safety concerns and alleged acts of sabotage. The facts — who was dismissed, how many, and whether replacements were largely expatriates — quickly became the centrepiece of sharp public debate.

The union’s counterpunch: choke the refinery’s lifelines

PENGASSAN escalated swiftly. In a letter dated 26 September, the union ordered an immediate halt to gas and crude supplies to the refinery, instructing branch chairmen — including units in the Nigeria Gas Infrastructure Company (NGIC) — to shut valves and suspend vessel loadings. For an integrated refinery that relies on continuous crude and gas inputs, stopping those flows is the most direct industrial leverage imaginable. The union framed the action as necessary to defend the constitutional right to organise and to force negotiations.

Dangote’s riposte: warn of scarcity, suspend naira sales

Dangote’s response doubled down on its operational logic. Citing constraints on crude allocations and the need to prioritise certain markets during maintenance and outages, company memos instructed customers that sales of petrol in naira would be suspended — a move justified internally as unavoidable given export volumes and crude-for-naira swap limits. Management also publicly defended the workforce reorganisation as necessary for safety and continuity. The result: an economic standoff where labour, corporate strategy and macro-economic policy collide.

What’s really at stake — from pump prices to the national currency

This isn’t only about jobs. The refinery sits at the intersection of three fragile systems:

Domestic fuel supply. If the refinery’s operations are interrupted, the immediate concern is a squeeze on local petrol availability. That can produce queueing at stations, hoarding, and price spikes — outcomes felt most keenly by commuters and small businesses.

Currency flows. Dangote had been selling some refined petrol in naira under a crude-for-naira swap arrangement designed to reduce demand for dollars. Suspending naira sales — or forcing crude deliveries to stop — risks pushing marketers back into dollar markets and adding pressure to an already weak naira.

Jobs and livelihoods. Hundreds of refinery staff and contractors (estimates vary across reports) face sudden unemployment or uncertainty; their loss of income cascades into families, transport operators and local vendors who depend on regular refinery activity.

Voices from the factory floor and corridors of power

On one side, union leaders cast the refinery’s actions as a frontal attack on workers’ rights. On the other, Dangote executives argue the company must defend its assets and business model — especially during periods of alleged sabotage or when export markets present higher returns. For neutral observers, the episode underlines the fragile balance between the private sector’s commercial imperatives and the social compact that keeps industrial peace in a country where fuel security is a political obsession.

How might this end?

There are several avenues, each with risk:

1. Rapid negotiation and mediated settlement. Government, regulators and independent mediators could pressure both sides to a face-to-face resolution that restores supplies while agreeing a labour-friendly transition plan. That’s the least disruptive outcome but requires goodwill and credible guarantees.

2. Legal action and protracted litigation. If either side pursues court remedies over dismissals or supply cutoffs, the dispute could drag on — prolonging market uncertainty.

3. Escalation into broader industrial action. If PENGASSAN’s supply cutoff is backed by other unions or widened to pickets, the refinery’s operations — and therefore national fuel availability — could be more deeply affected.

A test of institutions and expectations

Beyond the immediate players, the crisis tests institutions: will regulators enforce crude allocation rules and ensure domestic obligations are met? Will courts uphold labour rights while respecting corporate security needs? And crucially, can Nigeria balance the commercial logic of an export-capable refinery with its political need for stable, affordable domestic fuel? The answers will shape public trust in private energy projects and in the country’s capacity to manage strategically important infrastructure in the national interest.

Final note: the refinery’s promise is still large — but fragile

The Dangote Petroleum Refinery remains a strategic asset with the potential to reshape West African energy markets. Yet this episode is a reminder that megaprojects do not operate in a vacuum: they depend on stable labour relations, aligned policy incentives and transparent governance. If the crisis is resolved quickly and fairly, the plant can resume its role as an engine of jobs and lower fuel costs. If not, Nigerians could be left paying more at the pump — and the nation’s experiment in private-led energy transformation could be set back.

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Sources & further reading: Reuters reporting on layoffs and refinery operations; Reuters and MarketScreener coverage of the suspension of naira petrol sales; PUNCH, Vanguard, ChannelTV and Premium Times on PENGASSAN’s orders and the unfolding labour dispute.