AREET: Dangote Refinery, PENGASSAN Crisis Threatens Nigeria’s Economic Stability, Energy Security

Sunday Ehigiator

The Alliance for Economic Research and Ethics (AREET) has raised alarm over the escalating standoff between the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the management of the Dangote Petroleum Refinery, warning that the prolonged strike could trigger an economic and energy crisis capable of reversing Nigeria’s fragile recovery.

The crisis, which erupted over the suspension and dismissal of workers at the refinery following allegations of sabotage, has already drawn the backing of the Nigeria Labour Congress (NLC), amplifying the scale of the disruption. 

AREET in a statement by its Chairman, Dele Kelvin Oye described the situation as a “severe asymmetric shock” to energy security and macroeconomic stability, stressing that the strike threatens to plunge the country into fuel shortages, inflationary spikes, capital flight and loss of investor confidence.

The group noted that the Dangote Refinery, with a nameplate capacity of 650,000 barrels per day, was intended to end decades of reliance on imported refined petroleum products and anchor economic stability. 

“Any disruption to its operations,” it warned, “could force Nigeria back to costly fuel imports, widen the trade deficit, deplete foreign reserves and put fresh pressure on the foreign exchange market.”
AREET pointed out that the Central Bank of Nigeria (CBN) had only recently reduced the Monetary Policy Rate (MPR) from 27.5 to 27 percent, citing easing inflation and improved external reserves of about $42 billion. 

Those fragile gains, it cautioned, “could quickly evaporate if refinery operations remain crippled, leading to fuel scarcity, rising transport and power costs, a fresh wave of inflation, and possible reversal of monetary policy.”

The knock-on effects, the group said, would include capital flight, exchange rate depreciation, higher borrowing costs, and GDP downgrades.

The think-tank further warned that public allegations of sabotage against a flagship private investment like the Dangote Refinery could severely undermine Nigeria’s investment climate. 
On the social front, AREET warned that fuel shortages could stoke public discontent, raise transportation costs, and ignite wider protests that may escalate into a national political crisis. 

Such unrest, it cautioned, “could further constrain government’s capacity to respond effectively, especially with campaigns for the 2027 general election already gathering momentum.”

It also recommended a forensic investigation into the sabotage allegations, a temporary suspension of dismissals until due process is followed, and a coordinated communication strategy to reassure citizens and investors of continuity in fuel supply.