By William Emmanuel Ukpoju
Nigeria’s oil and gas industry has long been a paradox. With reserves that make it Africa’s energy powerhouse, the country should not be struggling with fuel shortages, unreliable power, and endless supply chain crises. Yet, bureaucracy, overlapping regulations, and entrenched interests have prevented the sector from reaching its full potential.
Into this landscape, the Dangote Refinery was introduced, a $20 billion private investment branded as Africa’s largest single-train refinery. Celebrated as a game changer, it vowed to end decades of costly fuel imports. However, rather than a smooth debut, the refinery has become the focal point of divisions with labour unions, such as the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
The disputes over unionisation, distribution, and supply are more than labour-management spats. They represent a deeper clash between private enterprise, bureaucratic inertia, and vested interests that thrive on inefficiency.
The Regulatory Web
Nigeria’s oil bureaucracy is infamous. At least 20 agencies are involved in approvals, licensing, and oversight. The 2021 Petroleum Industry Act (PIA) was designed to streamline this mess, creating the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Yet enforcement remains patchy.
For instance, producers often ignore the Domestic Crude Supply Obligation (DCSO), leaving refiners like Dangote to import crude at premium prices. Investors complain of delays stretching months for routine approvals, raising costs and uncertainty.
Professor Wumi Iledare, a leading petroleum economist, underscores the institutional weakness at the heart of Nigeria’s woes:
“What is unfolding between PENGASSAN, NUPENG, and the Dangote Refinery is not just about one company. It is about the credibility of Nigeria’s institutions, the rule of law, and the ethics of doing business in the oil and gas industry.”
The Dangote–NUPENG Rift
The refinery’s collision course with NUPENG and PENGASSAN revolves around these flashpoints:
Unionisation Rights – Labour groups accuse Dangote of resisting union membership among staff. The company insists it is protecting operations after reported acts of sabotage.
Distribution Control – Dangote’s $250 million investment in a fleet of trucks has been viewed as an attempt to bypass independent tanker drivers.
Access Rules – A dispute over loading stickers and union protocols escalated into strikes and threats of fuel supply disruptions.
And recently, the unions, including the NLC, have threatened to paralyse economic activities should Dangote fail to recall all the staff that have been sacked by the company.
For Iledare, the crisis goes beyond immediate grievances:
“Labour is right: no operator should be bigger than the country. That principle is non-negotiable. But shutting down the system is too costly. In oil and gas, a single day of disruption can create weeks of revenue losses, job disruptions, and shaken investor confidence.”
Industry Voices: Dangote’s Supporters
While unions push back, several industry commentators believe Dangote is confronting entrenched interests determined to maintain the status quo.
According to Ibrahim Ismaila Ahmed,
“I hail Dangote for holding on and pushing back against vested interests that are clearly fighting a lost battle, because there is no stopping an idea whose time has arrived! Nigeria has been operating on the mediocre lane for far too long. I pray that, just like in oil and gas, another bold entrepreneur or consortium will rise in power generation to accelerate industrialisation.”
Similarly, industry analyst Gabriel Cookey points to double standards in how unions and regulators treat the refinery:
“When he was raising loans and building, no stakeholders showed up. Now that the refinery is operational, they want to dictate decisions. Regulators questioned his product quality; he proved them wrong. Marketers boycotted his fuel, so he invested in trucks. The same groups that shunned him now want to control his haulage and staffing. It’s incredibly difficult being an entrepreneur in Nigeria.”
For Cookey, Dangote is being punished for trying to solve problems others left unattended for decades.
The Greed Factor
Some critics go further, accusing unions of profiteering at the expense of Nigerians.
Ebun Gift affirmed that,
“It is criminal for NUPENG to extort N50,000 per truck loaded. That money fuels the greed of a few executives. Depot owners, too, want to keep skimming value like in the old days. A private refinery deserves a consultative forum with staff, but extortion and sabotage cannot be disguised as labour rights.”
This sentiment resonates with a public weary of fuel queues, price spikes, and endless disruptions linked to union disputes.
Balancing Ethics and Enterprise
Still, experts caution against romanticising Dangote’s position. Prof. Iledare reminds the refinery of the importance of ethical balance:
“For 21 years, unions collected salaries from refineries that produced little value. That history should remind Dangote of the need to act ethically and equitably. True union victories are those that benefit many, not just members. The Petroleum Industry Act gives us tools to resolve disputes; regulators must enforce rules firmly and transparently.”
His call is for institutions, not brinkmanship, to set the rules of engagement: sanction breaches, protect rights, and ensure that no operator, union or billionaire undermines national interest.
Bureaucracy as the Real Enemy
Beyond the personalities, bureaucracy remains the silent killer of Nigeria’s oil and gas supply chain. Excessive red tape inflates costs, encourages rent-seeking, and frustrates innovation. Investors demand predictable rules, not overlapping approvals or shifting policies.
The NUPENG–Dangote saga is therefore a symptom of a deeper malaise: weak institutions that allow disputes to fester until they erupt in strikes or shutdowns.
The Way Forward
Streamline Regulation – Clarify roles among agencies, enforce timelines for licensing and contracting, and automate approvals.
Strengthen Enforcement – Apply the PIA transparently; sanction defaulting producers, unions, or operators equally.
Balance Labour Rights with National Interest – Protect workers’ rights without paralysing society. Establish mediation frameworks to resolve disputes before they escalate.
Support Entrepreneurs, Ensure Fairness – Encourage large private investments while safeguarding smaller players’ access to opportunities.
Transparency and Accountability – Publish compliance data and dispute outcomes to rebuild trust in institutions.
Posterity over Prosperity
The Dangote Refinery saga is more than a labour dispute. It is a test of Nigeria’s ability to reform bureaucracy, enforce its laws, and put the collective good above narrow interests.
As Prof. Iledare aptly concludes:
“No union, no company, no billionaire, and no minister is bigger than Nigeria. Posterity must matter more than prosperity. Only strong institutions, not personalities, can guarantee energy security and economic growth.”
For Nigeria, the choice is stark: continue drowning in bureaucracy and vested interests, or seize the opportunity to let private innovation and strong institutions drive a new era of energy security.