Image of Mr. Sidiku Olayinka

An economic expert has cautioned that the ongoing dispute between the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Dangote Petroleum Refinery could trigger severe macroeconomic shocks, disrupt fuel supply, and stall Nigeria’s fragile recovery.

Speaking on Frontline, a current affairs programme on Eagle 102.5 FM, Ilese Ijebu, analyst Mr. Sidiku Olayinka warned that Nigeria’s 4.23 per cent GDP growth could be reversed if the crisis persists.

“If PENGASSAN and Dangote are not checked, it will cause destruction in the land of development that we are already seeing. It will also stop investment from coming to Nigeria,” he said.

Olayinka estimated that the government risks losing over $20 billion in foreign exchange revenue and $12 billion in projected earnings. He added that such losses would likely push the state toward more borrowing or heavier taxation, with ripple effects on inflation and the naira.

He further warned that the threat of refinery shutdown would hurt ordinary citizens:

“If this refinery shuts down, it doesn’t just threaten the economy, it threatens the entire masses. By late October, we will start feeling the effect of that shutdown,” he cautioned.

The expert urged urgent reforms and parliamentary intervention to safeguard both investors and workers, while stressing that labour rights must not come at the expense of national interest.

Government Steps In

The Federal Government on Monday waded into the escalating face-off, hosting representatives of both parties in Abuja. The Minister of Labour and Employment, Mohammed Dingyadi, alongside the Minister of State, Nkiruka Onyejeocha, held a closed-door meeting with PENGASSAN’s leadership, led by President Festus Osifo, and senior officials from the refinery.

The union accused Dangote of illegally dismissing over 800 workers for attempting to join the association, in breach of Nigeria’s labour laws and International Labour Organisation (ILO) conventions.

Dangote Refinery, however, denied any wrongdoing, insisting the dismissals were part of an internal reorganisation to enhance safety and curb sabotage.

Strike Grounds Oil and Gas Regulators

The standoff has already paralysed operations at major oil and gas regulatory bodies. On Monday, PENGASSAN members enforced a nationwide strike that shut down the headquarters of the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

At NUPRC headquarters in Abuja, security operatives confirmed staff were barred from entering the premises. Similar scenes played out at the NMDPRA offices, where activities were fully grounded.

Tony Iziogba, PENGASSAN’s chairman in NMDPRA, confirmed “100 per cent compliance” with the strike, noting that enforcement was extended to NNPCL and other critical agencies.

In a strongly worded resolution signed by General Secretary Lumumba Okugbawa, the union directed members nationwide to halt crude oil and gas supplies to the Dangote Refinery and petrochemical facilities, warning that the workers’ dismissal had been compounded by the alleged replacement of Nigerians with foreigners.

“All IOC branches must ramp down gas production and supply to Dangote Refinery and petrochemicals,” the statement declared.

Rising Fears of Scarcity

The industrial action has heightened fears of fuel scarcity and power shortages. With NNPCL as the sole importer of petrol and regulatory agencies under lock and key, stakeholders warn that disruptions could choke supply chains and drive up fuel prices.

Oil marketers have already cautioned that halting crude and gas supply to Dangote could worsen distribution challenges and spark inflationary pressures across the economy.

For Olayinka, the situation underscores the urgent need for compromise:

“There is no way everybody will lose. Peace is what I would wish. Outside peace, then everybody will pay; PENGASSAN will pay, Dangote will pay, and every Nigerian too will pay,” he concluded.

As of press time, the government’s reconciliation meeting was still ongoing, with the nation bracing for either a breakthrough or deeper crisis in the oil and gas sector.