Industrial action disrupts energy production, hits crude, gas, and power supply
Nigeria’s energy sector suffered a sharp setback after a three-day strike by the country’s largest oil workers’ union disrupted crude oil and gas production, temporarily threatening supplies to the Dangote refinery before the dispute was resolved.
Production Losses at a Glance
According to senior executives at the Nigerian National Petroleum Company (NNPC), the strike — which lasted three days and ended on Wednesday — slashed national crude oil production by around 283,000 barrels per day within the first 24 hours of the work stoppage.
The disruption also led to the loss of about 1.7 billion standard cubic feet of natural gas per day and reduced electricity generation by more than 1,200 megawatts, representing a significant shortfall for an economy that relies heavily on hydrocarbons for revenue and energy supply.
In total, the strike is estimated to have cut roughly 16% of Nigeria’s daily oil output, 30% of marketed gas, and 20% of national power generation during the period.
Cause and Resolution of the Dispute
The industrial action was led by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). The union protested the dismissal of several workers at the Dangote refinery, accusing the facility’s management of unfair labour practices.
The strike was called off late Wednesday after negotiations resulted in the reassignment — rather than dismissal — of the affected employees, easing tensions that had threatened to escalate further.
Economic Impact
Nigeria, Africa’s largest oil producer, has been working to boost crude output to above 2 million barrels per day to shore up foreign currency earnings and stabilize public finances. The temporary loss of over a quarter-million barrels a day is a blow to those efforts.
Energy analysts say the disruption also delayed the restart of key crude and gas projects operated under joint ventures and production-sharing contracts, potentially dampening near-term production targets.
“The strike’s impact went beyond the refinery itself. It created systemic risks for energy supply, asset security, and the broader economy,” said a senior industry official familiar with the situation.
Strategic Importance of Dangote Refinery
The Dangote refinery, the largest in Africa, has become a cornerstone of Nigeria’s energy strategy. Since coming onstream, it has been meeting an estimated 35% to 50% of the country’s gasoline demand, reducing reliance on fuel imports and easing pressure on foreign exchange reserves.
Any disruption to its crude feedstock, analysts warn, risks undermining the country’s progress toward energy self-sufficiency.
Outlook
With the strike resolved, production is expected to recover gradually. However, industry observers stress that the episode highlights Nigeria’s vulnerability to labour unrest in its energy sector — a risk that could derail efforts to stabilize output and meet ambitious targets.
The government and industry leaders are now under pressure to strengthen labour relations and implement safeguards to prevent future stoppages that could threaten the country’s economic recovery.
Bottom Line
The Dangote refinery strike underscores the delicate balance in Nigeria’s oil and gas sector: while new infrastructure promises growth and stability, labour disputes and policy uncertainties remain potential flashpoints that can quickly disrupt production and strain the economy.
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