Nigeria’s delicate path to economic recovery is facing turbulence as the ongoing dispute between the Dangote Petroleum Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) threatens to disrupt production, erode investor confidence, and undermine long-term energy security.
At a media engagement on Tuesday, the Director-General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, cautioned that the face-off could trigger far-reaching consequences for industries across the country.
“The implication for manufacturers is dire. If this crisis persists, factories will be unable to produce, production schedules will be disrupted, and our competitiveness in the market will decline. The vacuum created will be filled by imports that do not face these disruptions, putting Nigerian industries at a disadvantage,” Ajayi-Kadir explained.
He warned that the ripple effects could include widespread job losses, weakened supply chains, reduced household purchasing power, and declining government tax revenues.
“This crisis hurts everyone—labour, government, manufacturers, the Dangote Group, and PENGASSAN. Even government revenue is at stake, because Company Income Tax is tied to production. That is why this must be resolved urgently,” he stressed.
Ajayi-Kadir further expressed worry about the negative perception the standoff might create internationally.
“The signal this sends to the global investment community is deeply troubling. Here is a $20 billion project, the largest single-train refinery in the world, and yet it has been subjected to regulatory battles, union disputes, and operational disruptions. The situation risks tarnishing Nigeria’s reputation as an investment destination,” he warned.
The Nigeria Employers’ Consultative Association (NECA) echoed these concerns. Its Director-General, Adewale Oyerinde, issued a sharp rebuke of PENGASSAN’s approach, branding the strike threats “reckless and tantamount to economic sabotage.”
“Disputes are part of the labour ecosystem, but Nigeria has institutions like the Industrial Arbitration Panel and the National Industrial Court to address them. Resorting to self-help undermines enterprise sustainability and ultimately harms the very workers unions claim to protect,” Oyerinde said.
He urged the Ministry of Labour and Employment to step in decisively, insisting that coercion or forced participation in union actions cannot be tolerated.
“Nigeria’s fragile recovery cannot be jeopardised by actions and pronouncements that are alien to both global and local labour relations practice,” he added.
The Alliance for Economic Research and Ethics (AREET) also raised red flags, describing the conflict as a potential asymmetric shock to Nigeria’s economy and energy sector. It warned that any prolonged disruption of the 650,000 barrels-per-day refinery—Africa’s largest—could reverse recent macroeconomic gains.
According to AREET, refinery paralysis could force a return to fuel imports, widen the trade deficit, deplete foreign reserves, destabilise the foreign exchange market, and ignite fresh inflationary pressures. The group recalled that the Central Bank of Nigeria recently lowered the Monetary Policy Rate from 27.5 to 27 percent, citing easing inflation and reserves at $42 billion. Those gains, it said, could quickly unravel.
“If refinery operations remain stalled, we risk fuel scarcity, higher transport and power costs, capital flight, exchange rate depreciation, and even a downgrade in GDP projections,” the group noted, adding that the situation could stoke public discontent, trigger protests, and create political instability ahead of the 2027 elections.
To avert such risks, AREET called for an emergency tripartite meeting within 48 hours, bringing together PENGASSAN, the NLC, Dangote management, the Ministries of Labour and Petroleum, and the Central Bank, with an independent mediator present. It also proposed a forensic probe into sabotage allegations, a moratorium on dismissals until due process is concluded, and a coordinated communication strategy to reassure Nigerians and investors.
“Nigeria stands at a crossroads. The Dangote Refinery represents a generational opportunity to end fuel import dependence. A protracted shutdown risks undoing hard-won progress. Only a mediated and transparent resolution that addresses sabotage claims and restores refinery operations can safeguard livelihoods and economic recovery,” AREET concluded.
Despite federal mediation attempts, negotiations have so far collapsed without resolution, deepening anxiety among manufacturers, employers, and policymakers. Economic experts warn that failure to swiftly resolve the impasse could slow industrial growth, worsen inflation, and further weaken foreign direct investment inflows at a time when they are already at historic lows.
For many observers, the Dangote–PENGASSAN clash is now a litmus test for Nigeria’s ability to balance workers’ rights, investor protection, and macroeconomic stability. The eventual outcome, they say, may go a long way in determining the direction of Nigeria’s energy and industrial future.
