…You can’t corner entire value chain, NARTO tells Dangote
By Adewale Sanyaolu
Unless interventions by the federal government prevails, Nigeria’s oil sector is on the precipice of a major energy crisis following the deepening feud between Dangote Refinery and petroleum marketers.
While marketers rally behind oil workers’ union, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), the National Association of Road Transport Owners (NARTO), NUPENG and DAPPMAN have cautioned Dangote against attempts to corner the entire value chain and warned that such control could destabilise the downstream industry.
They explained that the move was in gross violation of Sections 212 and 213 of the Petroleum Industry Act.
Dangote, on his part, insists that any blockade or disruption in product distribution would trigger nationwide fuel queues, worsening the hardship faced by consumers.
In the midst of the escalating dispute, industry workers warn that prolonged hostilities could put thousands of jobs at risk, compounding uncertainty in an already fragile energy landscape.
Although the Dangote Refinery has repeatedly emphasised its openness to partnerships with other downstream stakeholders, arguing that the industry benefits more from collaboration, it has also clarified that it has no intention of venturing into the retail market, noting it previously turned down offers to acquire filling stations.
However, the feud took a dramatic turn over the weekend as PENGASSAN directed seven of its branches to halt crude oil and gas supplies to the Refinery, further escalating tensions.
PENGASSAN’s decision to blockade gas and crude oil supplies to the Dangote Refinery was a retaliatory step against a recent reorganization exercise at the plant, which the union claims affected more than 800 of its members and replaced them with over 2,000 Indian workers. In a letter dated September 26 and signed by its General Secretary, Lumumba Okugbawa, the union accused the refinery’s management of punishing its members for exercising their constitutional right to unionize. The directive instructed branch chairmen in major upstream and midstream oil companies—including TotalEnergies, Chevron, Seplat, Shell Nigeria Gas, Oando, and the Nigerian Gas Infrastructure Company (NGIC)—to immediately cut off all crude oil and gas supplies to the refinery. The downstream crisis had first flared when NUPENG declared industrial action over the refinery’s refusal to allow its truck drivers to unionise.
Added to this is the stiff opposition of NUPENG against the parallel registration of the Direct Truck Drivers Association by Dangote Refinery, a move NUPENG declared as illegal and in clear violation of extant labour laws.
Dangote Refinery recently procured about 4,000 Compressed Natural Gas (CNG) trucks for the free distribution of fuel to retails outlets across the country.
The development deepened tensions between PENGASSAN, NUPENG, NARTO and the Dangote Refinery, as unions warned that the blockade could trigger massive job losses among NUPENG’s driver-members and wipe out investments by NARTO members, many of whom have borrowed heavily and sunk billions of naira into truck acquisitions. The National President of the Petroleum Retail Outlets Owners Association of Nigeria (PETROAN), Mr. Billy Gilly-Harry, also threw his weight behind PENGASSAN’s decision to halt gas and crude supplies to the refinery.
On the blockade by PENGASSAN, the Dangote Petroleum Refinery warned that the recent directive issued by the union to cut crude oil and gas supplies to the refinery could plunge Nigerians into fresh rounds of fuel scarcity while inflicting huge revenue losses on the government.
He added that rules in the industry, including labour laws, are meant to be obeyed by everybody, saying no one company should try and act in a manner that suggests that they are superior to everybody.
“There is no need to take anyone for granted. If PENGASSAN is maintaining its ground on what has to be done for workers, then I don’t think that is overkill.’’
In a statement released on Saturday, the refinery described the directive as “criminal, reckless and an act of economic sabotage” that, if enforced, would disrupt the production and nationwide supply of critical petroleum products, including petrol, diesel, aviation fuel, kerosene, and cooking gas.
The company stressed that these products are indispensable to daily life and the economy, warning that Nigerians at every level, from households to businesses and industries, would bear the brunt of shortages. It noted that a sudden disruption in supply will translate into insufferable hardship for millions of Nigerians.
“The products that would be disrupted and stopped include, but are not limited to, aviation fuel, petrol, kerosene, diesel, and cooking gas – all products that are used and required by all stripes of Nigerians and persons living in Nigeria, whether high and mighty or lowly and ordinary. In what circumstance would it be justified for PENGASSAN to so disrupt and introduce insufferable hardship into the living conditions of Nigerians? None that we can see,” the company said.
“The follow-up question is, in whose interest and on whose behalf is PENGASSAN directing and intending to inflict such anarchic and criminal disruption upon the Nigerian society and persons living in Nigeria? Most certainly, not in the interest of the Nigerian State and/or the Nigerian public and citizens.”
Beyond the immediate hardship on citizens, Dangote Refinery warned that the government’s revenue would also be dented, given the refinery’s status as one of the country’s largest taxpayers and contributors to both federal and state coffers. The company said any pause in operations would stall contributions to the national purse and undermine investor confidence in Nigeria’s oil and gas sector.
The statement noted, “This is also economic sabotage against the Nigerian State at multiple levels. Dangote Refinery is the only refinery of its type in Africa and ordinarily should be the pride of all Nigerians as well as the governments of Nigeria. It should ordinarily have special protection and status and indeed qualifies as a strategic national asset.”
It added that an irreparable injury to the Dangote Refinery, such as PENGASSAN has directed, constitutes a national embarrassment to the country and a disincentive to external investors who ordinarily would have been encouraged by the success of Dangote Refinery to contemplate investing in Nigeria’s oil and gas sector generally.
“PENGASSAN may also not be aware that Dangote Refinery is one of the largest contributors to the revenue purse of the Nigerian governments – both federal and sub-nationals. That contribution is currently threatened by PENGASSAN and would, of course, be paused if and as soon as, and for as long as, the PENGASSAN directive is implemented by its branches,” it noted.
The statement also noted that PENGASSAN had no legal authority to interfere in supply contracts between the refinery and its vendors, insisting that the action undermined the rule of law.
“Absolutely no law gives PENGASSAN the right to direct its branches to ‘cut off’ gas and crude oil supplies to Dangote Refinery or at all. There is also no law in our statute books that would support or enable the PENGASSAN branches having to ‘cut off’ gas and crude oil supplies to Dangote Refinery or at all.
Besides, it constitutes criminal conduct for PENGASSAN or its members to disrupt and/or interfere howsoever in the contract between Dangote Refinery and its various vendors for the supply of gas and crude oil to the refinery. Those supply contracts were not entered into with PENGASSAN; they were entered into by Dangote Refinery with third-party vendors and suppliers, and PENGASSAN has no right whatsoever to disrupt and/or interfere with the performance of those contracts.”
Calling on the Federal Government and security agencies to act swiftly, the refinery urged Nigerians to take note of the “unquantifiable and irredeemable hardship which PENGASSAN wishes to inflict on all of us” if not checked, warning that fuel queues, energy shortages, and price hikes could quickly resurface.
It urged PENGASSAN to submit to an amicable and legal resolution and not resort to economic sabotage and mob action that could introduce mayhem and chaos and easily translate into anarchy.
In his comments, PETROAN National PRO, Mr. Joseph Obele, said the association, having conducted a 14-day review of Dangote Refinery’s CNG truck operations, concluded that the thousands of CNG trucks have worsened Lagos traffic, leading to increased travel times and decreased productivity.
He added that stations selling non-Dangote products were experiencing poor sales due to a N20 price difference, saying the price gap may make it difficult for non-Dangote stations to compete.
Private depots are retrenching staff due to market threats, with some already on sale. This could lead to job losses and economic instability in the region. The impact on the livelihoods of depot workers and their families could be severe.
Many PETROAN members are retrenching workers and putting stations up for sale. This may lead to a decline in the number of retail outlets and job losses.
The impact on local economies and communities could be significant, as indicators suggest looming bankruptcy for marketers, truck owners, and retailers. This could lead to a collapse of the entire supply chain.
The marketers cautioned against viewing Dangote Refinery as a savior, warning of potential monopoly which could lead to an uneven playing field and stifle competition.
Also speaking, the National President of the Nigerian Association of Road Transport Owners (NARTO), Mr. Yusuf Lawal Othman, equally expressed concerns over the move by Dangote Refinery to be in breach of Section 212 of the PIA.
Othman said that while Dangote Refinery is licensed to play in the midstream sector of refining, its decision to extend into the distribution of petroleum products through the acquisition of about 4,000 trucks is a violation of the PIA and should not be encouraged.
The NARTO President further warned that a huge number of jobs and investments are about to be eroded as a result of this investment decision by the Dangote Refinery.
Besides, he added that all the depots across the various regions in the country are about to go comatose.
“There are depots in the South-South, South-East, North-Central, and South-West with truck owners operating at these depots. What this decision means is that depots in the coastal region cannot be serviced as a result of the deployment of these Dangote trucks.
The investors have taken loans from banks to build these depots and acquire trucks. What about the numbers of families and jobs that would be displaced?
Again, when you look at the indirect jobs being created through these trucks owned by NARTO members, it is massive. The vulcanisers, mechanics, electricians, and others would be displaced as a result of this decision.”
He said the loading and distribution of petroleum products by a single entity is a dangerous trend that must not be encouraged because it poses a threat to the country’s energy security.
He added that the government and its regulators have a role to play in protecting SMEs across the country because they are the engine of growth.
He equally pointed out that the Federal Government also has the responsibility to protect its own investment, depots, and workers in NNPC Retail Limited.
Similarly, he said foreign investors with trucks operating in the downstream sector must also be protected.
In his view, the Executive Secretary of DAPPMAN, Mr. Olufemi Adewole, said the Dangote Refinery has, in recent times, successfully exported refined petroleum products to the United States and other countries with well-established refining capacity and competitive supply chains.
These markets, according to him, despite having robust domestic production, remain open to external suppliers in the interest of supply diversity and market efficiency.
“If such countries had adopted restrictive trade practices, these export opportunities would not have existed. This underscores the global value of open, competitive supply chains, a principle Nigeria must uphold, not abandon.”
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