In a continent rich with natural resources but plagued by underdevelopment, the Dangote Refinery stands as a symbol of Africa’s potential for self-reliance and industrialization. Built at a staggering cost of $20 billion by Africa’s richest man, Aliko Dangote, the 650,000-barrel-per-day facility in Lagos promises to end Nigeria’s decades-long dependence on imported petroleum products. Yet, its journey has been marred by relentless frustrations from petroleum middlemen, import cartels, and labor unions in the oil sector, highlighting a broader “middlemen web” that stifles industrial progress across Africa.
This web, characterized by opaque deals, sabotage, and vested interests, not only threatens Dangote’s ambitious project but also deters investors from committing to large-scale ventures in Nigeria and beyond.
The Frustrations Facing Dangote Refinery
Since commencing operations in 2024, the Dangote Refinery has faced a barrage of challenges orchestrated by entrenched interests in the oil import business. Petroleum middlemen, often described as a powerful cartel, have been accused of manipulating prices, spreading misinformation about product quality, and lobbying against local refining to protect their lucrative import monopolies.
These importers, who have long profited from Nigeria’s reliance on foreign refined fuels despite the country’s status as Africa’s largest crude oil producer, view the refinery as an existential threat. Adding to the woes are labor unions, particularly the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). In late September 2025, tensions escalated when Dangote Industries fired over 500 workers allegedly for attempting to unionize, citing violations of company policy.
PENGASSAN responded with a nationwide strike, shutting down offices of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian National Petroleum Company Limited (NNPCL), and threatening and ditching our orders to disrupt gas supplies to the refinery.
The union accused Dangote of breaching Nigeria’s labor laws and international conventions by suppressing workers’ rights to organize.
Government-mediated talks between Dangote and PENGASSAN ended in deadlock, with the union suspending the strike temporarily but vowing to resume if demands for reinstatement and better conditions aren’t met.
Critics, including civil society organizations (CSOs), argue that these union actions are being influenced by foreign oil cartels aiming to sabotage the refinery.
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Social media discussions on X (formerly Twitter) echo this sentiment, with users accusing PENGASSAN of colluding with international interests to keep Nigeria as a perpetual importer of refined products.
Dangote himself has publicly decried these efforts, stating that oil mafias, stronger than drug cartels, have attempted to undermine the project through tactics like withholding crude supplies and questioning product standards.
In recent cases, the refinery bypassed middlemen by selling fuel directly to bulk buyers and filling stations, a move that has shaken the traditional distribution chain and reduced costs for end-users. The refinery purchased 4,000 CNG Tankers to ensure direct supply of refined products to end users just to avoid the frustration of union leaders.
Over 30 Active Refinery Licenses, Yet Little Progress
Nigeria’s oil sector is riddled with unfulfilled promises. The Federal Government has issued over 47 Licenses to Establish (LTE) and 30 Licenses to Construct (LTC) for refineries in the past year alone, totaling more than 77 licenses aimed at boosting domestic refining capacity to over 1.75 million barrels per day.
Despite this, only a handful, including Dangote and a few modular refineries are operational. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reports that while licenses cover ambitious projects, most remain stalled due to funding issues, regulatory hurdles, and interference from middlemen who benefit from the status quo.
This proliferation of licenses without corresponding development shows how the middlemen web discourages genuine industrialization. Potential refiners face the same frustrations as Dangote: difficulty securing crude oil feedstock, as international oil companies (IOCs) prioritize exports over local sales, and pressure from import lobbies that inflate costs through opaque contracts.
Greedy Middlemen Driving Investors Away
The greed of these middlemen extends far beyond Dangote, driving an exodus of investors from Nigeria and Africa at large. Nigeria’s Minister of State for Petroleum Resources, Heineken Lokpobiri, has blamed middlemen for the departure of oil multinationals, noting that their introduction into the sector was a critical mistake that has eroded investor confidence.
Scandals like the “dirty petrol saga” in 2022 exposed how middlemen exploit opaque oil contracts to import substandard fuels, adding unnecessary costs and risks.
Across Africa, similar dynamics prevail. Corruption and organized crime in the oil sector have led to indigenization efforts that favor local elites over broad-based development, resulting in a substantial increase in local production shares but at the cost of efficiency and foreign investment.
Investors cite policy inconsistencies, security issues from oil theft, and cartel manipulations as reasons for diverting funds to more stable markets.
In Nigeria alone, oil majors like Shell and ExxonMobil have scaled back onshore operations, exacerbating unemployment and economic dependency.
What Governments Must Do to Break the Web
To foster true industrialization, African governments, particularly Nigeria’s, must take decisive action against this entrenched web. First, protect flagship projects like Dangote Refinery by intervening directly in disputes, as urged by CSOs, to prevent sabotage from cartels and unions.
President Bola Tinubu’s administration should enforce presidential directives that eliminate middlemen from contracting cycles, as implemented by the Nigerian Content Development and Monitoring Board (NCDMB), which has already shortened processes and lowered costs.
Second, intensify crackdowns on oil theft and illegal bunkering, building on recent military operations that dismantled sites in the Niger Delta.
Revoke non-performing refinery licenses to weed out speculative holders and mandate IOCs to supply crude to local refiners under penalty of license revocation.
Third, reform labor laws to balance workers’ rights with industrial needs, ensuring unions cannot hold national infrastructure hostage.
Finally, promote direct sales models, as Dangote has done, to bypass middlemen and stabilize prices, fostering a competitive market that attracts rather than repels investors.
The Dangote Refinery experience is a litmus test for Africa’s industrial ambitions. Breaking the middlemen web isn’t just about one refinery – it’s about unlocking the continent’s potential for self-sufficiency and prosperity. Failure to act risks perpetuating a cycle of dependency that has held Africa back for too long.
