A strike by a major oil workers union is threatening to disrupt fuel supplies in Nigeria as government-mediated talks dragged on into Tuesday.

The dispute kicked off on Friday when Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) accused the refinery of firing 800 local workers for unionising and replacing them with 2,000 workers from India.

The refinery called the allegations a "complete falsehood" and said that it had fired a small number of staff over "acts of sabotage", though it did not disclose the exact figure.

PENGASSAN called a strike and also said it would stop crude oil and gas from being delivered to the refinery – the latter of which Dangote has contested in court.

Talks under way

Local media reported on Monday that striking PENGASSAN members also blocked the offices of the Nigerian National Petroleum Corporation – the state-owned oil firm – as well as the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

A Dangote spokesperson confirmed to AFP that government-mediated talks were ongoing as of Tuesday.

Before last year's opening of the privately run Dangote refinery, with a capacity of 650,000 barrels per day, Nigeria had to import almost all its petrol despite being a major oil producer.

The Dangote refinery has driven down prices of petrol for consumers while also shaking up Nigeria's oil sector.

Petrol distribution

Its recent moves to bring its own, natural gas-powered trucks to distribute its petrol in the country sparked a strike by a fuel tanker drivers' union earlier in September, which accused the company of hiring new drivers on the condition they didn't join a union.

The refinery denied the allegations.