Oil marketers drag Dangote Refinery to court over moves to restrict import licenses

Three prominent oil marketers AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited have called on the Federal High Court in Abuja to dismiss a lawsuit filed by Dangote Petroleum Refinery and Petrochemicals.

In a joint counter affidavit marked FHC/ABJ/CS/1324/2024, dated November 5, 2024, the marketers argue that supporting Dangote’s bid to restrict the issuance of petroleum import licenses could destabilize Nigeria’s oil sector.

Dangote Refinery, in an originating summons filed on September 6, 2024, accused the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigeria National Petroleum Corporation Limited (NNPC), alongside several oil marketers, of violating Sections 317(8) and (9) of the Petroleum Industry Act (PIA).

The refinery contends that NMDPRA issued petroleum import licenses inappropriately, without proving a product shortfall.

The refinery is urging the court to declare that NMDPRA’s actions contradict its responsibilities under the PIA, as it has not sufficiently promoted local refineries like Dangote’s.

However, Shafa, A. A. Rano, and Matrix Petroleum countered that Dangote Refinery does not produce enough petroleum products to meet the country’s daily consumption needs. They further argued that Dangote failed to provide evidence to support claims of adequate supply.

The marketers insist that they have met all legal requirements to be issued import licenses by NMDPRA, in line with Section 317(9) of the PIA, and are entitled to continue their importation activities.

They stressed that monopolizing the oil sector would harm the country’s economy and emphasized their compliance with regulatory standards for obtaining the licenses.

The outcome of this legal battle could have significant implications for Nigeria’s petroleum industry and the balance between local refining and product importation.

“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the plaintiff’s business or its refinery.

“The import licenses issued to the defendants by the 1st defendant are in line with the provisions of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other relevant laws,” they contended.

They insisted that giving Dangote Refinery the power of monopoly in Nigeria’s petroleum industry as it sought in the instant suit, would kill competitive pricing of petroleum products in the country.

Stressing that such an act would further deteriorate the country’s critically ailing economy.

They also added that it would “unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity”.

The marketers explained that if Nigeria puts all her energy eggs in one basket by stopping the importation of petroleum products and allowing the plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products will continue to rise and energy security will elude Nigeria.

They also noted that should the refinery break down being a monopolized sector, the country will be plunged into a hot mess of energy crisis.

“That in the event of any breakdown in or obstruction to the production chain of the plaintiff which stops it from producing Nigeria will be thrown into energy crises because it does not have the reserves that would last it for at least 30 days that it would need to order, pay for, freight and import refined products into tanks in Nigeria.

“That amidst the glaring absence of any credible and demonstrable proof that the plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians, is a recipe for disaster in Nigeria’s energy sector.”