The Alliance for Economic Research and Ethics (AREET) has issued a cautionary statement regarding the potential economic fallout from continued disruptions at the Dangote Petroleum Refinery in Nigeria.
In a communiqué released on Thursday and endorsed by AREET chairman Dele Kelvin Oye, the organization emphasized that any interruption to the refinery’s functioning could compel Nigeria to revert to expensive fuel imports. This scenario would likely exacerbate the trade imbalance, drain foreign currency reserves, and exert additional strain on the foreign exchange market.
This warning comes amid escalating tensions between the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the refinery’s management. AREET highlighted that such conflicts risk triggering a dual economic and energy crisis, potentially undermining Nigeria’s delicate path to recovery.
The Dangote Refinery, designed with a processing capacity of 650,000 barrels per day, was envisioned as a strategic asset to eliminate Nigeria’s long-standing dependence on imported refined petroleum products and to bolster economic resilience.
Oye stressed that labor strikes in this critical sector at this juncture would deliver a significant asymmetric shock to both energy security and the broader macroeconomic environment. He warned that such industrial actions could lead to fuel shortages, surging inflation, capital flight, and diminished investor trust.
He further noted that the Central Bank of Nigeria (CBN) had recently lowered the Monetary Policy Rate (MPR) from 27.5% to 27%, reflecting improvements in inflation rates and a strengthened external reserve position, currently estimated at around $42 billion.
“These fragile economic improvements are at risk of rapid erosion if refinery operations continue to be disrupted,” Oye cautioned. “Fuel scarcity would drive up transportation and electricity costs, ignite new inflationary pressures, and potentially force a reversal of monetary policy measures. Nigeria is at a critical crossroads.”
“The Dangote Refinery offers a transformative chance to break free from fuel import reliance. Prolonged industrial disputes that hinder its output threaten to undo the modest yet hard-earned macroeconomic progress. A fair, transparent mediation process that thoroughly investigates sabotage allegations, ensures equitable labor practices, and guarantees uninterrupted refinery operations is essential to safeguarding jobs, attracting investment, and sustaining national economic recovery.”