Nigeria’s energy sector is grappling with significant disruption as the Nigerian National Petroleum Company Limited (NNPCL) confirmed a sharp 16% decline in oil production following a three-day strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). The industrial action, which stemmed from unresolved conflicts between PENGASSAN and the management of Dangote Refinery, has rippled across the country’s oil, gas, and power supply chains, raising concerns over energy security and economic stability.
According to a letter sent by NNPCL’s Group Chief Executive Officer to the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Petroleum Regulatory Commission on September 29, 2025, the strike caused a production shortfall of about 283,000 barrels of crude oil per day, representing roughly 16% of Nigeria’s total daily output. It also resulted in a loss of 1.7 billion standard cubic feet of gas per day and a reduction of over 1,200 megawatts in power generation. Within just the first 24 hours of the strike, these losses had already become evident, illustrating the scale and immediacy of the disruption.
The fallout is not limited to the oil sector. The sharp decline in gas supply has significantly weakened electricity generation, leading to reduced power availability for homes, industries, and small businesses. Experts warn that if the industrial action continues, the impacts could escalate further, potentially resulting in widespread power shortages, increased production costs for manufacturers, and disruptions to essential services that rely on steady electricity supply.
For micro, small, and medium-sized enterprises (MSMEs), which are already battling high energy costs and unstable power, the situation could worsen. Reduced gas supply often translates into higher electricity tariffs and greater reliance on alternative power sources such as diesel generators — a costly option that eats into profit margins. Sectors such as manufacturing, cold-chain logistics, and agro-processing, which depend heavily on consistent energy access, are likely to feel the pressure most.
Analysts also caution that the disruption could undermine Nigeria’s broader economic recovery efforts, as oil and gas revenues remain a critical source of government income and foreign exchange. A sustained decline in production could weaken fiscal stability and reduce funding for public infrastructure and social programmes.
The dispute between PENGASSAN and Dangote Refinery underscores deeper tensions in Nigeria’s oil and gas industry, particularly around labour relations, operational policies, and workforce welfare. While negotiations are ongoing to resolve the standoff, stakeholders are urging swift intervention from government and industry leaders to prevent prolonged damage to the energy sector and the wider economy.
As talks continue, the situation remains a stark reminder of how labour disputes in strategic sectors can disrupt national productivity. For Nigeria to safeguard its energy future, experts say stronger conflict resolution mechanisms, better stakeholder engagement, and more resilient energy infrastructure are urgently needed.
