The Dangote Petroleum Refinery and Petrochemicals FZE has filed a lawsuit at the Federal High Court in Abuja, seeking the revocation of import licences issued to the Nigeria National Petroleum Corporation
The Dangote Petroleum Refinery and Petrochemicals FZE has filed a lawsuit at the Federal High Court in Abuja, seeking the revocation of import licenses issued to the Nigeria National Petroleum Corporation Limited (NNPCL) and five other companies for importing refined petroleum products into Nigeria. The companies targeted in the suit include Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
The case, marked FHC/ABJ/CS/1324/2024, was filed by Senior Advocate of Nigeria (SAN), Ogwu Onoja, on behalf of Dangote Refinery. The Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and NNPCL are listed as the 1st and 2nd defendants, while the five other companies are named as the 3rd to 7th defendants.
In the lawsuit, Dangote Refinery is seeking N100 billion in damages against the NMDPRA for allegedly continuing to issue import licenses to NNPCL and the other companies despite the refinery’s production of Automotive Gas Oil (AGO) and Jet-A1, which exceeds the current daily consumption of petroleum products in Nigeria. The refinery claims that NMDPRA’s actions violate sections of the Petroleum Industry Act (PIA), which encourage local refineries and discourage unnecessary importation of petroleum products.
According to an affidavit submitted by Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, the import licenses granted to these companies are severely harming the plaintiff’s business. Hashem explained that Dangote Refinery has invested billions of US dollars into producing AGO and Jet-A1 for the Nigerian market, but the continued importation by other companies leaves the refinery’s products largely un-patronized.
Hashem also pointed out that NMDPRA had threatened to impose and collect a 0.5% levy on Dangote Refinery’s wholesale transactions and off-takers, as well as another 0.5% levy for the Midstream and Downstream Gas Infrastructure Fund (MDGIF). He argued that these levies violate statutory provisions that protect businesses operating within Nigeria’s Free Zones, which were established to encourage competition, attract foreign investment, and offer tax advantages.
In addition, Hashem accused International Oil Companies (IOC) and certain vested interests, in collaboration with the defendants, of deliberately working against the Dangote Refinery to prevent an indigenous refinery from resolving the country’s energy challenges. He expressed concern that these actions threaten the success of the refinery’s operations, potentially jeopardizing its investments unless the court intervenes.
As part of its demands, Dangote Refinery is asking the court for an injunction to stop NMDPRA from issuing or renewing any further import licenses to the named defendants or other companies. It also seeks a court order to seal all tank farms, storage facilities, and warehouses used by the defendants for storing imported petroleum products in Nigeria. In addition, Dangote Refinery requests that the court block NMDPRA from imposing any levies on the refinery, including the 0.5% levy mentioned earlier.
During a hearing of the case, George Ibrahim, SAN, representing Dangote Refinery, informed the court that there had been developments between the parties. He explained that the defendants had initiated discussions about settling the matter out of court after being served with the originating summons. As a result, Ibrahim requested an adjournment to allow time for potential reconciliation between the parties.
Justice Inyang Ekwo, who presided over the hearing, granted the request and adjourned the case until January 20, 2025, to allow for a report on the progress of settlement discussions or the formal service of court documents if no settlement is reached.
This legal battle represents a significant step by Dangote Refinery in its efforts to protect its investment and ensure fair competition in Nigeria’s petroleum industry. The case underscores broader challenges in the country’s oil and gas sector, particularly around balancing local production with the importation of refined products. While the Nigerian government has long encouraged the growth of local refineries as a means to reduce dependence on imported petroleum products, the issuing of import licenses to companies continues to raise concerns for local refineries like Dangote’s.
Should Dangote Refinery succeed in its lawsuit, it could potentially reshape the dynamics of petroleum product supply in Nigeria, with a greater emphasis on locally refined products. However, the outcome remains uncertain, pending further legal proceedings or a potential settlement between the parties involved.