Dangote Refinery crisis deepens over suspension of crude, gas supply 

…as NLC mobilizes to join PENGASSAN on nation-wide strike 

Africa’s richest man, Alhaji Aliko Dangote, is currently fighting an existential battle to keep his $20 billion refinery project from going under as the powerful oil cabal in the nation’s downstream petroleum sector, made up fuel marketers, rent seekers, and workers unions launched an all out war against the plant, Business Hallmark can report.

The crisis, which started two weeks ago took a dramatic turn for the worse last weekend when one of the unions in the face-off, Petroleum and Natural Gas Senior Staff Association of Nigeria, (PENGASSAN) on Saturday ordered it branches to suspend crude and gas supply to the Refinery, which it projected would lead to its total shutdown. This is even the Nigerian Labour Congress yesterday began to mobilize members to join the industrial action. This followed the Refinery’s management action terminating the appointments of union members.

A statement entitled, A CALL FOR WITHDRAWAL OF SERVICES, the National Executive Council (NEC) of PENGASSAN, in an emergency meeting of all its branches today, Saturday, 27th of September, noted as follows: “That Dangote Refinery’s unilateral action to sack over 800 members of our Association for joining PENGASSAN is an affront to all workers in Nigeria and a deliberate violation of Nigeria’s labour laws, the Constitution, and ILO conventions.

“Consequently, the NEC resolves as follows: All PENGASSAN members working across field locations are to withdraw services effective 06:00hrs on Sunday, 28th of September, 2025 and commence 24-hour prayers. This includes all control room operations, panel operations, and outfield personnel; and secondly,

“All PENGASSAN members across all offices, companies, institutions, and agencies should withdraw all services effective 00:01 on Monday, 29th of September, 2025.”

Meanwhile, the management of     Dangote Refinery has slammed PENGASSAN over its directive to its members to suspend all crude oil and gas supplies to the plant, describing the union’s action as lawless, criminal and economic sabotage.

According to BH findings, the mammoth refinery in Ibeju-Lekki, Lagos with a capacity of 650,000 barrels per day has not known peace since the start of construction works in 2016 and inauguration on 22 May 2023,

Since its conception in 2013, it has been from one trouble to another for the refinery. When it’s not landowners disrupting construction works, it’s dubious Original Equipment Manufacturers (OEM), and fuel marketers bent on frustrating the refinery through the deliberate supply of substandard equipment and boycott of its products.

While the refinery has come out of previous challenges largely unscathed, its current battle with organised labor unions and fuel marketers is threatening to undo Kano-born billionaire’s over 12 years  of painstaking planning and efforts on the plant.

BH reliably gathered at the weekend that Dangote Refinery’s  prolonged squabble with leadership of workers unions in the plant, especially the Petroleum Tanker Drivers (PDT), National Union of Petroleum and Natural Gas Workers (NUPENG), and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) over workers right to unionize, have become a litmus test for its management capacity.

Battle of Supremacy

The management of Dangote Refinery and the leadership of the unions have been locked in a vicious battle over the alleged refusal of its management to allow workers in its employment to unionize.

The crisis came to a head two weeks ago when members of PTD, an affiliate of NUPENG, who had embarked on a nationwide strike, blocked all the entrances leading to the Dangote refinery, preventing the loading of products.

PENGASSAN later joined the fight, warning that if the stand-off continued, it would have no option but to join in shutting down refinery operations to protect workers’ rights and interests.

While it lasted, the industrial action, apart from disrupting commercial activities at the refinery, led to a temporary fuel scarcity in some parts of the country

Order was restored after the intervention of the Federal Government and Dangote Refinery obtained a court order restraining NUPENG from going on strike.

However, sources in Dangote Industries Limited (DIL) informed our correspondent that the unions have become agents of destabilization to fuel marketers and others forces opposed to the continued operations of the largest single-train refinery in the world.

According to the sources, who craved anonymity, the refinery has  suffered frequent outages attributed to deliberate sabotage to equipments in the facility.

Speaking at the West African Refined Fuel Conference in Abuja in June 2025, Dangote said the refinery was delayed by over two years by a prominent foreign company, which  deliberately supplied faulty equipment it was commissioned to build.

“One prominent company, which I shall not name, supplied us with faulty equipment, which I believe was intentional. The equipment was actually quite critical to the start-up of the refinery, and without that, we couldn’t have started.

“It took us two years to correct the various defects in commissioning that unit,” Dangote told shocked participants .

Other hostile actions against the facility include constant sabotage of the refinery’s 204,000 barrels per day Residue Fluidized Catalytic Cracking Unit (RFCCU), power plants, and the effluent treatment plant, which was gutted by fire in 2024.

As a result, the refinery has repeatedly failed to achieve its production target of 650,000 barrels per day. “Owing to numerous breakdowns of units at the refinery, which technical and security experts traced to deliberate sabotage, production has stalled at 610,000 barrels per day.

“In fact, the refinery’s fluidized catalytic cracking unit has been out of service since August,  affecting gasoline supply in the Atlantic basin. And all efforts to fix it have been futile,” one of the sources disclosed.

BH also gathered that apart from its gasoline production unit, the refinery has been experiencing problems at its diesel production unit.

Trouble on All Sides

Troubled by the constant sabotage acts, the refinery’s management, it was learnt, decided to wield the big stick against those suspected of working against the company.

On Thursday, September 25, the nation was jolted by the unprecedented news that the management of Dangote Petroleum Refinery and Petrochemical had terminated the appointment of all its Nigerian employees.

In a letter addressed to all staff members signed by the Chief General Manager, Human Asset Management, Dangote Group, Femi Adekunle, the management  said it was left with no choice but to carry out a total reorganization of the refinery, resulting in the disengagement of the affected staff, effective Thursday, September 25, 2025.

According to Adekunle, the reorganization followed multiple cases of reported sabotage across refinery units that posed major safety risks.

The workers were told to hand over all company properties in their possession to their line managers and obtain an exit clearance, with the specific date for the process to be communicated later.

“The Finance Department, by a copy of this letter, is advised to compute all your benefits and entitlements in line with your terms of employment and conditions of service and pay the amount due to you (less all indebtedness), subject to the condition that you have obtained the exit clearance certificate as mentioned above,” the human asset manager said in the letter.

Though the number of affected staff was not officially disclosed by the refinery, the sack letter was addressed to all staff. Our correspondent, however, learnt that the exercise affected 800 workers, who were described as irredeemable by the company.

But rather than solving the problem, management’s decision to lay off troublesome staff is bringing more problems and headaches for the refinery.

PENGASSAN, in a letter to seven of its branches dated September 26 and signed by its General Secretary, Lumumba Okugbawa, ordered them to immediately cut off crude oil and gas supplies to the refinery, further deepening it woes.

Defending its decision to cut off crude oil and gas supply to the Dangote Refinery, PENGASSAN accused its management of disengaging its members for joining labour unions.

Apart from instructing its branch chairmen in key upstream oil companies, including Chevron, Seplat, Renaissance Energy, TotalEnergies, Oando, Nigerian Gas Infrastructure Company (NGIC), and Shell Nigeria Gas Company to cut off all crude oil and gas supplies to the refinery, PENGASSAN threatened to picket the refinery if its management fails to address its demands.

“As you are aware, the Management of Dangote Petroleum Refinery has disengaged our members in reaction to the exercise of their constitutional right to being unionized.

“They have gone further on a mission of misinformation and propaganda to justify this illegitimacy rather than engaging meaningfully with us to right the wrong.

“Consequent to these, you are hereby directed to cut off gas supply to NGIC effective immediately. All crude oil supply valves to the Refinery should be shut. The loading operation for vessel headed there should be halted immediately.

“NGIC Chairman, ensure that gas supply to the Refinery is cut off effective immediately. All chairmen on this summons are to report promptly the progress of the directive. Kindly accept the assurances of our highest esteem. Thank you”, the union said in the directive to its branch chairmen.

The coming on board of the Dangote Petroleum Refinery had reshaped Nigeria’s downstream petroleum sector.

Entrenched Interests

Apart from leaving fuel importers in a precarious position, the gigantic refinery is also challenging Europe’s long-standing dominance in supplying petroleum products to Africa’s largest country.

However, those affected by the new order have refused to go down without a fight. Oil marketers, apart from boycotting Dangote’s products, have recruited proxies, who are also threatened by the refinery’s continued activities, to fight its cause.

Dangote, industry sources informed BH, ran into trouble when it decided to start the direct supply of petroleum products nationwide to filling stations and end users free of charge.

The scheme, a N720 billion investment program meant to streamline fuel supply and strengthen distribution networks in participating states, will see 4,000 CNG-powered trucks distribute 65 million litres of refined petroleum products daily when fully operational.

However, BH gathered that NUPENG is against the initiative because it will negatively affects its operations and members. For instance, the free fuel delivery scheme will bypass existing tanker drivers under the PTD union, an affiliate of NUPENG, and render them redundant.

Apart from this, the scheme will also put a stop to some of the unofficial taxes collected by NUPENG in fuel depots.

Our correspondent reliably gathered that the union collects N1 (one naira) on every liter of refined petroleum products lifted from fuel depots by its members.

Findings show that fuel tankers operating in the country come in three major sizes, the 33,000, 45,000 and 60,000 liters capacity.

“Apart from the monthly union dues collected from each member, NUPENG gets N33,000, N45,000 and N60,000 respectively from the N1 levy on the three categories of tankers when they are fully loaded.

“And several thousands of tankers are loaded daily. You can see why they will rather die than see their ‘pot of soup’ taken away from them.

“And we are not talking about fuel marketers, who have profited from fuel importation. The cabal in the oil industry and its backers are deeply entrenched. They won’t go down easily, so Dangote needs protection.

“If their strong hold on the oil industry is not broken, they will continue to frustrate Dangote Refinery until they kill his business the way they killed our national oil companies,” said Bode Atanpaku, an oil and gas consultant based in Lagos.

In a statement on Saturday made available to BH, the Dangote said PENGASSAN’s action, if not stopped, will lead to to another major fuel crisis, with Nigerians unable to get Liquefied Petroleum Gas (cooking gas), petrol and diesel to buy.

“Apart from the lawlessness and criminality inherent in the PENGASSAN’s instruction to its branches, the association’s directive amounts to economic sabotage at multiple levels.

“In plain language, PENGASSAN has directed its branches to disrupt and stop the supply of petroleum products from the Dangote refinery to Nigerians.

“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.

“In what circumstance would it be justified for PENGASSAN to so disrupt and introduce insufferable hardship into the living conditions of Nigerians? None that we can see.

“Perhaps, PENGASSAN needs to be reminded that Nigeria is a country governed by laws. Our laws do not brook self-help and mob action that could introduce mayhem and chaos and easily translate into anarchy.

“It is instructive that no sooner had the association issued a press release than it abandoned the path of lawfulness and embraced criminal conduct and the path that leads to mayhem and anarchy by issuing the directive aforementioned”, the statement by Dangote Refinery read.

The company also described PENGASSAN’s directive as a brazen display of criminality, insisting that no law in the Nigerian constitution gives the body the right to direct its branches to stop the supply of crude oil and gas to the facility.

“Besides, it constitutes criminal conduct for PENGASSAN or its members to disrupt and/or interfere in any way whatsoever with the contract between Dangote Refinery and its various vendors for the supply of gas and crude oil to the refinery.

“These supply contracts were not entered into with PENGASSAN; they were entered into by Dangote refinery with third-party vendors and suppliers, and PENGASSAN has no right whatsoever to disrupt and/or interfere with the performance of those contracts”, the management said, while calling on Nigerians to resist the brazen act.