Dangote Refinery seeks court intervention to nullify import licenses of NNPCL, five others

Dangote Petroleum Refinery and Petrochemicals FZE has approached the Federal High Court in Abuja, seeking to void import licenses issued to the Nigeria National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited, A. A. Rano Limited, and four other companies.

The refinery claims these companies continue to import refined petroleum products despite Dangote’s capacity to meet Nigeria’s consumption needs without shortages.

In the case, filed as suit number FHC/ABJ/CS/1324/2024, Dangote Refinery is also demanding N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The plaintiff alleges that the authority unlawfully issued import licenses for products such as Automotive Gas Oil (AGO) and Jet Fuel, despite the fact that Dangote’s production exceeds current national demand for these products.

The defendants include NMDPRA, NNPCL, Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.

Dangote’s Legal Claims

In the originating summons, Dangote’s legal counsel, Ogwu James Onoja, SAN, urged the court to declare that NMDPRA is in violation of the Petroleum Industry Act (PIA), which stipulates that import licenses should only be issued in cases of a product shortfall. The refinery also accused the authority of undermining local production, to the detriment of Dangote’s multibillion-dollar investment in Nigeria’s energy sector.

An affidavit from Ahmed Hashem, Group General Manager at Dangote Refinery, stated that import licenses granted to these companies have significantly harmed Dangote’s business, leaving much of its locally refined products unpatronized. He added that NMDPRA has threatened to impose a 0.5% levy on Dangote’s petroleum transactions, violating the laws governing free-zone enterprises.

Allegations of Conspiracy

Hashem further claimed there is a concerted effort, possibly involving international oil companies and local competitors, aimed at undermining the success of Dangote’s indigenous refinery. He argued that the court’s intervention is necessary to prevent further statutory violations by the NMDPRA.

Court Proceedings and Possible Settlement

During a recent court session before Justice Inyang Ekwo, Dangote’s counsel, George Ibrahim SAN, revealed that settlement discussions between the parties had commenced. The case was adjourned to January 20, 2025, for a report on the potential settlement or service of the originating summons.

Background

This legal battle arises as tensions between Dangote Refinery and regulatory bodies escalate. Dangote had earlier expressed his intention to sell his refinery, amid regulatory disputes and challenges with equity partners. Despite these hurdles, the federal government granted marketers direct access to purchase petroleum products from Dangote Refinery, bypassing NNPCL as an intermediary.

This case could significantly impact Nigeria’s petroleum industry and its approach to local production and importation policies.