Nigeria's Dangote refinery still operating despite mass strikes

Nigeria's 650,000 b/d refinery has continued to operate despite mass protests that have gripped its oil logistics, company and trade sources said Sept. 30.

Major strike action from the Petroleum and Natural Gas Senior Staff Association of Nigeria (Pengassan) has threatened to put growing strain on the operations of the Lagos-based refinery and trigger protests in solidarity from its larger affiliate, Nigeria Labor Congress.

Simmering tensions between the refinery and Pengassan erupted into a diplomatic crisis on Sept. 26, when the union announced Dangote had fired 800 of its members working at the facility. The organization has ordered its workers to cut off crude and gas supplies to the refinery, alleging that it had violated its workers' rights to unionize.

Emergency talks between the refinery, Pengassan and Nigeria's Ministry of Labor ended in a deadlock after more than seven hours of negotiations, sources close to the discussions said Sept. 30.

Talks are expected to resume around 2pm local time as officials urgently seek to avoid a shutdown of the refinery that could trigger widespread fuel disruption.

Speaking to Platts on Sept. 30, a Dangote executive said the refinery continues to receive and process its crude and sell its oil products, including via domestic truck sales.

The refinery is in the process of rolling out its own truck fleet, with roughly 1,000 vehicles in operation. However, it continues to rely on third-party logistics providers to transport the majority of its supplies, leaving it at risk of broader industrial action from labor union Nupeng.

Local trade sources, who were not authorized to provide public comment, warned that most Lagos oil depots were already battling critically low inventories due to the strike action. As a result, several have stopped offering prices, traders said, causing widespread uncertainty over future availability.

On Sept. 29, Nigeria's Industrial Court ruled that the Pengassan strike was illegal and ordered the union to call off its action targeting the facility, responding to a case brought by the union against Dangote.

The striking union also directed its members shut the offices of state oil firm NNPC and the industry regulator, the Nigerian Upstream Petroleum Regulatory Commission. However, there were no disruptions to production at the country's oil fields, officials told Platts Sept. 30.

Dangote responded to the strike action by accusing Pengassan of a "terror" action and calling on the federal government to end the industrial action.

"The oligarchs in Pengassan have proved themselves to be terrorists and turned the association into a bully organization," the refinery said in a statement.

Dangote Group on Sept. 26 said it was undertaking a "total reorganization of the plant" to combat repeated acts of sabotage and address safety concerns. This was after Nigerian media circulated a memo notifying its staff of layoffs.