Government-Labour Conflict in the downstream of the oil and gas sector in Nigeria has not been short of conflicts. In the time past, the conflicts were largely between employers and employees however, in the Fourth Republic a new trend has emerged that is the involvement of State Governments and Labour Union in the industry in conflict. The conflict was a product of the reaction of the Union against the social economic policies of the Government. This new trend is best demonstrated in Lagos State, where the attempt by the state Government to manage traffic led to clashed between the state Government and members of the National Union of Petroleum and Natural Gas Workers (NUPENG) thus conflict ensued.The work argues that bad governance was the root of the conflict as successive governments abandoned the infrastructural need of the nation in the sector which culminated in the dependent on imported refined crude oil products thus created it own problem of managing traffic as the major importation outlet is in Lagos and there is lack of parking lots to accommodate the inflows of unprecedented tanker vehicles.