Nigeria’s energy market was thrown into turmoil after a three-day disruption at the Dangote Refinery, Africa’s largest single-site facility, as labour unrest caused a sharp dip in oil production, drove fuel prices higher, and sent cooking gas costs soaring nationwide.
- Nigeria’s energy sector’s reliance on the Dangote Refinery was challenged by a recent three-day strike, disrupting oil and gas operations.
- The strike resulted in significant economic consequences, including a loss of over 600,000 barrels of crude oil production
- Reports indicate the strike was triggered by mass layoffs at the refinery, exposing systemic vulnerabilities within Nigeria’s energy infrastructure.
- Households faced doubled cooking gas prices while petrol prices increased nationwide, further straining the economy.
Nigeria’s energy market is reeling from the ripple effects of a three-day strike at the Dangote Refinery that halted operations across key oil and gas facilities, disrupted production, and pushed up fuel and cooking gas prices nationwide.
From production terminals to household kitchens, the refinery’s operations ripple through every corner of the economy, highlighting both its transformative potential and the country’s vulnerability to shocks within its domestic energy infrastructure.
The industrial action triggered by mass layoffs at Africa’s largest refinery complex has exposed Nigeria’s growing vulnerability to disruptions within its own energy network, an irony for a facility once hailed as the answer to the country’s chronic fuel shortages and import dependence.
What began as a labour dispute at the Dangote Refinery has now rippled through every layer of national life, from oil terminals and filling stations to household kitchens, further revealing how the 650,000-barrel-per-day plant has become central to Nigeria’s economic stability and energy security.
Refinery disruptions threaten energy security – Nigerian government
Nigeria’s Vice President, Kashim Shettima, in a recent broadcast, had warned against mounting challenges facing the Dangote Refinery, saying that any disruption to its operations could undermine the country’s energy security and reverse gains made in reducing fuel importation.
Shettima emphasized that the refinery is a “strategic national asset” whose success is vital not only for Nigeria’s economic stability but also for West Africa’s growing dependence on its refined fuel exports.
He cautioned that ongoing labour disputes, policy inconsistencies, or sabotage could jeopardize investor confidence and stall the nation’s broader industrialization drive.
Oil output dips as strike disrupts production
Nigeria’s crude oil production took a significant hit following the unrest, with the Nigerian National Petroleum Company Limited (NNPCL) confirming a loss of over 600,000 barrels in just three days.
The strike, which began after reports that Dangote Industries had dismissed more than 800 workers, quickly spread beyond the refinery, paralysing operations at several critical energy facilities.
According to NNPCL Chief Executive Officer Bayo Ojulari, the strike by members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) made “optimum production almost impossible” as technical staff across refineries, terminals, and upstream facilities joined the protest.
“I think it was unfortunate that the Dangote and PENGASSAN issue led to a strike, and whenever there is a strike and critical staff manning critical facilities are not available, optimum production is almost impossible,” Ojulari said after meeting with President Bola Tinubu in Lagos.
“In this particular case, we actually lost significant production of over 200,000 barrels per day that was deferred.”
The loss comes at a delicate time for Nigeria, which has been working to raise output levels after years of underperformance relative to its OPEC quota.
Analysts warn that further disruptions could erode investor confidence and complicate the government’s efforts to attract fresh capital into the oil and gas sector.
Cooking gas prices soar amid supply disruption
The strike’s impact extended beyond crude production to household energy costs. Across major Nigerian cities, the price of liquefied petroleum gas (LPG) commonly known as cooking gas, doubled within a week, leaving many families struggling to refill their cylinders.
NNPCL’s Ojulari attributed the spike to a temporary halt in loading and distribution activities during the strike.
“The increase you saw was relatively artificial because for the period of the strike, movements and loading were delayed by about two, three days,” he said. “And because of that, you see that impact. As things return back to normal, it takes some time for distribution to be fully restored.”
Bassey Essien, Executive Secretary of the Nigerian Association of Liquefied Petroleum Gas Marketers told The Electricity Hub that the shortage was directly linked to the industrial action. “Dangote Petroleum Refinery, Nigeria’s most prominent local supplier, could not distribute during the strike,” he said.
In response, Aliko Dangote confirmed that the refinery currently produces around 2,000 tonnes of LPG daily and pledged to increase supply directly to households if distributors fail to reduce costs.
Fuel prices climb as queues return
The strike also reignited tension at petrol stations nationwide, with the NNPCL raising the pump price of Premium Motor Spirit (PMS) from ₦890 to ₦905 per litre at its retail outlets, a ₦15 increase, or roughly 1.7 percent.
The adjustment coincided with reports of light queues resurfacing in parts of Abuja, particularly around Wuse Zones 4 and 6.
The President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, blamed the increase on disruptions caused by the standoff between PENGASSAN and the Dangote Refinery.
“It is due to PENGASSAN’s strike disruption. However, our members are still selling between ₦885 and ₦895 per litre,” Maigandi explained.
The refinery’s brief shutdown, though now resolved, has reinforced broader concerns about Nigeria’s overdependence on a single facility to drive its domestic refining ambitions.
Analysts say while the Dangote Refinery remains a symbol of industrial ambition, its growing influence also exposes Nigeria’s energy economy to new systemic risks where a labour dispute can ripple through the entire supply chain, from upstream production to household kitchens.
