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Between strong labour union and weak industry 09 Oct 2025

The conflict between Dangote Petroleum Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) erupted and escalated very quickly. At the heart of it was the push to unionise the refinery’s staff. In short order, the refinery laid off 800 staff, adducing a “reorganisation” exercise as its reason. PENGASSAN alleged anti-labour motive for the dismissals and called for industrial action and a halt to the supply of gas to the refinery. It took two days of mediation by the federal government to achieve a truce.

Nigeria’s 1999 Constitution (as amended) guarantees freedom of association. The International Labour Organisation, through its various Conventions, affirms this right and that of collective bargaining by workers. As a result, PENGASSAN was operating within the ambit of both domestic law and international labour practices in pushing for unionisation of the staff of Dangote Refinery. However, in doing this, as it is the case with labour unions, PENGASSAN’s motives were not entirely altruistic. It would financially benefit from its advocacy through the remittance of check-off dues by the refinery.

Self-interested actions, even if legitimate, could have moral burdens. PENGASSAN was already carrying heavy ones. Its members continue to draw salaries from state-owned refineries that have hardly worked in the last decade. While the political authorities are culpable in the failed turnaround maintenances of the refineries that have cost Nigeria billions of dollars, the grand malfeasance has been met with a conspiracy of silence by PENGASSAN. The lack of pushback against the recent full withdrawal of petrol subsidies, despite its deep impact on the welfare of the people, suggests the labour body and its affiliate unions have departed from their longstanding tradition of defending public interest. Hence, the public was largely sceptical about PENGASSAN’s agitation.

Dangote Refinery itself has not acted with enough discretion. It’s decision to lay off hundreds of its workers amid the crisis may be unfair to many of the individuals involved. While labour unions speak with one voice, not all members agree on every issue. Since the gains from unionism are shared, members who disagree with certain demands or quibble about the bargaining process nevertheless have to tag along. Therefore, many of the workers sacked by the refinery may not necessarily agree with PENGASSAN or its combative antics.

Truth be told, Dangote Refinery has been beleaguered by hostilities since it launched its operations last year. It has alleged sabotage by the international oil companies operating in Nigeria, citing their refusal to sell crude oil to the refinery. Regulatory bodies have at times appeared to undermine the refinery, too. After years of government posturing about reviving local refining, regulators have continued to support importation of refined petroleum products into the country, ostensibly to prevent Dangote Refinery from becoming a monopoly. The downstream sector regulator even claimed that diesel from the refinery was “inferior” to imported products. And only after bouts of recrimination did the federal government reach a deal to supply the refinery with crude oil in naira. 

Surprisingly, Dangote Refinery has been struggling to supply the local market due to lack of cooperation from product retailers, despite offering lower prices. After completing the project that cost $20 billion to build, the refinery now finds itself investing heavily in logistics for the nationwide distribution of its products. Once it started operations, the refinery suddenly lost its tag as an ‘important national economic asset’, a designation that made the last administration to provide the refinery with equity investment and preferential access to foreign exchange during years of its construction.

It is troubling that a private refinery that is less than two years in operation should have to deal with PENGASSAN’s false choice between unionisation or continued operation. The refinery deserves to be given time to develop its labour relations, in accordance with the law. Sustainable HR practices affirm the importance of overall job satisfaction for firms to retain their staff and enjoy operational stability and good public image. Labour relations should be guided by policy and rule of law. Legal redress is also part of fostering good labour practices and a legitimate avenue for resolving disputes. 

A 2023 analysis by the US Department of Treasury shows union membership has had a chequered history. It rose with industrial manufacturing in the early part of the 20th century. After membership fell over a period of five decades to the mid-1970s, it has been on a somewhat steady rise but still below historical highs. Some of the factors contributing to the decline include the shift from manufacturing to services. This has also come with various hostile and incentive measures by employers in resistance to unionism, weaker government support for labour bodies, and loss of influence by the unions. The decline in unionism has happened alongside the increasing prosperity of the US economy, where the key concern remains inequality between the richest 1 per cent and the rest to the population.

Labour unions have been criticised for fostering workplace hostility, stagnation, and making industries uncompetitive. PENGASSAN should be careful that its actions do not undermine Dangote Refinery, the largest single investment in the history of Nigeria. The country does not need a strong labour union in a weak industry – as was the case in the mid- and down-stream sectors of the oil and gas industry before Dangote Refinery came on stream.