When considered one of Nigeria’s highly effective oil unions took on the Dangote Refinery in a labour dispute within the final week of September, it was a battle between two giants – and the nation felt the influence. Oil output fell, provide chains have been disrupted and the economic system confronted paralysis earlier than the federal government brokered a truce.
The quick spark for the dispute was the shedding of about 800 workers of the $20bn Dangote Refinery, the 650,000 barrels per day facility reputed to be the world’s largest single-train refinery. The ostensible spark for the dispute was a reorganisation that the corporate mentioned was geared toward curbing sabotage. However the Petroleum and Pure Fuel Senior Workers Affiliation of Nigeria (Pengassan), representing white-collar employees, mentioned the refinery administration had prohibited unions on the plant and fired employees who have been trying to unionise. The union responded by calling a nationwide strike of its members that began on 28 September.
The fitting to hitch a union
“Beneath Nigerian regulation and worldwide greatest apply, workers have the fitting to hitch a commerce union of their selection,” mentioned Elvis Asia, a Lagos-based lawyer and chartered arbitrator. “Victimising workers on that foundation just isn’t permissible.”
Members of the Dangote Refinery department of Pengassan mentioned in a press release that there was an pressing must unionise within the face of perceived discrimination in opposition to them in comparison with phrases provided to expatriates from India and Pakistan. They allege that on 25 September the refinery administration despatched workers a questionnaire asking them to point their membership in Pengassan. Those that affirmed their membership have been mentioned by the union to have been subsequently terminated.
Administration denounces ‘terrorists’
The Dangote Refinery mentioned its operations have been unaffected by the strike however had preventing phrases for Pengassan. “The oligarchs in Pengassan have proved themselves to be terrorists and turned the affiliation right into a bully organisation,” mentioned the refinery administration.
Pengassan president Felix Osifo declared that Nigeria “is greater than Pengassan, the way in which it’s greater than Dangote and the presidency”. He insisted that the union will at all times arise for its respectable rights.
“We’ve been round for 50 years – earlier than the Dangote Refinery got here on stream,” Osifo mentioned. “Ought to this similar occasion happen once more tomorrow, our method shall be precisely the identical.”
Whereas the strike lasted Nigeria noticed a 16% drop in oil output, amounting to about 283,000 barrels per day, as loadings have been delayed on the oil-export terminals. A reduce in gasoline provides to energy stations of about 1.7bn normal cubic ft per day diminished energy era by a fifth. The state-owned Nigerian Nationwide Petroleum Firm (NNPC) reported that missed trades throughout these three days resulted in “important income losses”. There have been additionally disruptions to home gas provide, with lengthy strains forming at petrol stations, and a sudden uptick in costs for different items because the economic system priced within the gas value improve.
Union calls for met
The value of the strike was too huge to pay for President Bola Tinubu’s administration. Following mediation overseen by the federal government, the Dangote Refinery administration agreed to reinstate the employees or switch them to different firms throughout the conglomerate with out lack of pay. The employees’ proper to membership of unions was additionally recognised by the Dangote Group. In different phrases, it was a victory for Pengassan, which then referred to as off the strike after three days.
Past threatening authorities income within the brief time period, the strike additionally revealed systemic vulnerabilities with wider ramifications for the economic system. With the failure to revive state-owned refineries, the Dangote Refinery is now the spine of Nigeria’s home refining capability, and when it sneezes the entire economic system catches a chilly.
For downstream distribution, disruption rapidly interprets into provide bottlenecks that affect costs. The sharp leap in cooking gasoline costs as a result of strike introduced the message residence for a lot of Nigerian households.
The price of vitality has extreme implications for nearly all of Nigeria’s manufacturing and distribution of products and companies, which makes disruptions politically delicate. At a time when Tinubu is hoping to reap the advantages of his robust financial measures, together with ending subsidies and floating the change price, the refinery labour dispute was considered as a significant menace.
After the deal, authorities ministers reaffirmed their assist for the Dangote Group. At an financial summit in Abuja on 6 October vp Kashim Shettima accused the oil union of holding the nation to ransom over a minor dispute. “Aliko Dangote just isn’t a person, he’s an establishment and he’s a number one mild in Nigeria’s economic system completely,” mentioned Shettima. “How we deal with this gentleman will decide how outsiders will decide us.”
His place was backed by funds and planning minister Abubakar Bagudu, who mentioned on the similar occasion that the refinery is “systemically too essential” and must be “supported in any respect prices”.
Extra labour challenges on horizon
Pengassan is considered one of two oil trade unions which have needed to take care of each the federal government and worldwide vitality firms up to now a long time over employees’ rights in Africa’s prime oil-producing nation. The opposite is the blue-collar Nationwide Union of Petroleum and Pure Fuel Staff (Nupeng). Each unions have up to now proven a readiness to confront the federal government and the oil majors.
Stress is mounting between Dangote Refinery and Nupeng over the corporate’s choice in September to deploy 4,000 vans powered by compressed pure gasoline (CNG) for gas distribution. This may bypass a system largely operated by Nupeng members, elevating union fears of job losses. A strike menace by the union in September was averted solely by the intervention of state safety officers who nervous concerning the wider influence of such a strike.
The Dangote Group insists that the CNG fleet is supposed to enhance product provide effectivity. It says it would create greater than 24,000 jobs for drivers, mechanics and others. It later introduced that it plans to deploy 10,000 distribution vans.
In an October 15 memorandum to the Home of Representatives Committee on Petroleum, Nupeng mentioned that democracy can’t exist with out the safety of employees’ rights. “Let it not be forgotten that Nupeng and Pengassan performed a historic function in restoring Nigeria’s democracy,” Afolabi Olawale, the final secretary of the union, advised lawmakers. “That very same democratic spirit should now shield the rights of employees who preserve the nation’s vitality sector alive.”
Strikes present risks of monopoly
For Nigeria, the disputes reveal the dangers of a close to monopoly controlling the provision of 1 product. Whereas the Dangote Refinery has the capability to fulfill Nigeria’s home demand, estimated at 50m litres day by day, Dangote at the moment provides 20m litres day by day, in keeping with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Although greater than 25 refineries are licensed in Nigeria, solely about six are at the moment operational: the Dangote Refinery and 5 with capacities of between 5,000 and 10,000 barrels per day. A 200,000 barrels per day refinery is being constructed by Nigeria’s BUA Group in Akwa Ibom state.
“As a rustic, Nigeria is in pressing want of a diversified funding method in our vitality combine, to additional drive an growth within the economic system past the standard concentrate on fossil fuels,” says Farouk Ahmed, chief government officer of the NMDPRA. “As we spend money on that infrastructure, we should additionally guarantee we diversify our vitality sources and scale back dependency on any single gas.”
