Nigerian Union Calls Off Strike at Dangote Refinery as Labor Truce Reached

Nigeria’s main oil labor union will end a strike that threatened to cut crude supplies to the Dangote oil refinery, after the company agreed to reassign workers who’ve been laid off.

The Petroleum and Natural Gas Senior Staff Association of Nigeria will start the process of calling off the work stoppage after it held two days of talks with government and company officials, the minister of labor and employment said in a statement on Wednesday.

Pengassan, as the union is known, threatened to curb supplies to the facility after it said more than 800 workers were fired over alleged acts of sabotage.

Dangote has agreed to reabsorb the dismissed staff to other companies within the group, with no loss of pay, the ministry said.

A halt to supplies would have disrupted the operations at the 650,000 barrel-a-day Dangote refinery as well as oil exports. Nigeria ships an average of 1.5 million barrels of oil a day, while the biggest refiner on the continent meets between 35% to 50% of Nigerian gasoline demand.

Gasoline futures rose the most relative to crude since June late last week, after the labor issue first emerged. Dangote has become a vital cog in the global market for the fuel, limiting Nigeria’s imports and occasionally sending shipments overseas.

The strike had minimal impact on oil production, according to Gbenga Komolafe, chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission.

The action had “zero impact” on operations, Devakumar Edwin, vice-president at Dangote Industries Ltd., said on Wednesday.

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