Dangote Petroleum Refinery is ‘systemically crucial’ to national development −Nigerian Government

*The Nigerian Government says Aliko Dangote’s Petroleum Refinery is too important to fail after a dispute with the Petroleum and Natural Gas Senior Staff Association of Nigeria recently threatened to cut crude supply to the oil-refining plant

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Nigeria’s government said Aliko Dangote’s oil refinery is too important to fail after a dispute with labor unions threatened to cut crude supply to the plant.

The Petroleum and Natural Gas Senior Staff Association of Nigeria ended a three-day strike over claims that Dangote fired workers after they agreed to join the oil workers’ union.

Nigeria’s minister of budget and economic planning, Atiku Bagudu, said the refinery “must be supported at all costs” because enterprises like it “can be systemically too important for a country’s development”.

Aliko Dangote’s oil refinery is too important to fail, Nigeria’s government said, following the company’s dispute with labour unions that threatened to cut crude supply to the plant.

The Petroleum and Natural Gas Senior Staff Association of Nigeria on Oct. 1 ended a three-day strike, which sought to shut down the operations of the 650,000 barrels-a-day processing plant over claims that Dangote fired 800 workers after they agreed to join the oil workers’ union.

“Not only must Dangote Refinery work, but we must recognise” that enterprises like that “can be systemically too important for a country’s development,” Atiku Bagudu, Nigeria’s minister of Budget and Economic Planning, said at an economic summit in Abuja on Monday.

The refinery “must be supported at all costs,” he said.

The comments appear to reflect a change in the government’s attitude toward Africa’s richest man.

Just a year ago, Dangote was battling with authorities on multiple fronts — from a raid by the anti-graft agency on his offices early last year, to allegations that he wants an import ban on diesel.

The volley of accusations prompted the billionaire to scrap a plan to invest in a new 5 million tonnes a year steel plant in Africa’s most-populous nation.

Bagudu didn’t explain if being designated systemically important would render the facility exempt from strikes.

The nation’s powerful oil and gas sector unions have the ability to disrupt crude production, which accounts for more than 80% of Nigeria’s export earnings, to pressure the government to meet demands.

Nigeria has banks that it has declared as “systemically important” for the purpose of increased supervision.

Dangote said the workers were fired for acts of repeated sabotage of the $20 billion plant and as part of reorganization efforts.

PENGASSAN, as the union is called, ended the strike after Dangote agreed to reassign workers who’ve been laid off.

Nigeria should not be held to ransom “because of a minor labor dispute,” the West African nation’s Vice-President Kashim Shettima said at the same conference.

“Aliko Dangote is not an individual, he’s an institution and he’s a leading light in Nigeria’s economy permanently,” Shettima said.

He added: “How we treat this gentleman will determine how outsiders will judge us.”

Aliko Dangote, president and chief executive officer of Dangote Group.Photographer: Victor J. Blue/Bloomberg

At the height of the strike, Pengassan had ordered its members working at companies including local units of TotalEnergies SE and Chevron Corp. to shut supply to the Dangote refinery and cut off Nigeria’s exports.

While Dangote Refinery said the strike didn’t affect its operations, the state-owned Nigerian National Petroleum Co. estimated it impacted more 200,000 barrels a day of crude production.

Gas and generation of “about 1.2 megawatts of power was affected by that strike,” Bayo Ojulari, group chief executive officer of NNPCL, said.

The plant has helped eliminate Nigeria’s dependency on imported refined products and become a net exporter of petroleum for the first time in at least three decades.

Located on the outskirts of Lagos, Nigeria’s commercial hub, it supplies 35% to 50% of the nation’s gasoline needs and exports products to markets including the US.

“If Dangote had invested $10 billion in Microsoft, in Amazon, in Google, probably, he would be worth $70 billion to $80 billion by now,” Shettima said.

“Instead he opted to invest in his country and we owe it to future generations to jealously protect, promote, project and preserve the interest of this great Nigerian,” Shettima said.

Dangote is Africa’s richest person, with assets valued at $29 billion, according to the Bloomberg Billionaires Index. (Piece extracted from Bloomberg)

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