Dangote Petroleum Refinery and Petrochemicals has taken legal action against the Nigerian National Petroleum Corporation Limited (NNPCL), Matrix Petroleum, and four other companies over the issuance of import licences for petroleum products.
The refinery has filed a lawsuit at the Federal High Court in Abuja, asking the court to void the import licenses issued to these companies, claiming they are affecting local production.
In the N100 billion lawsuit, Dangote Refinery accuses the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of issuing licenses for the importation of refined petroleum products, despite the refinery producing enough to meet domestic demand.
The companies targeted in the suit include NNPCL, Matrix Petroleum Services, A. A. Rano Limited, Aym Shafa Limited, T. Time Petroleum Limited, and 2015 Petroleum Limited.
The Dangote Refinery, Africa’s largest privately-owned refinery, is a project envisioned to solve Nigeria’s long-standing fuel crisis by refining crude oil locally, cutting the country’s reliance on fuel imports.
In its lawsuit, Dangote argues that there is no need for continued imports of petroleum products like Automotive Gas Oil (AGO) and Jet Fuel (Jet-A1) when the refinery is capable of producing these products in quantities that exceed daily consumption in Nigeria.
According to Dangote Refinery, the actions of NMDPRA and the companies involved in the importation of petroleum products are not only illegal but are crippling the business.
A key part of Dangote’s argument is that NMDPRA is in violation of the Petroleum Industry Act (PIA), which restricts the issuance of import licenses to periods when there is a shortfall in local production.
The refinery claims that, with its capacity to refine petroleum locally, these licenses are being wrongly issued and are hurting Nigeria’s economy.
“The issuance of these import licenses to other companies is a violation of the law,” said Ogwu James Onoja, the lead counsel representing Dangote.
“They are undermining local production, and this is not only damaging to our client but also to Nigeria’s push for energy self-reliance.”
In addition to asking the court to void the licenses, Dangote is seeking N100 billion in damages from NMDPRA, claiming that the wrongful issuance of import permits has significantly harmed its business.
The refinery’s legal team argues that the importation of fuel by other companies has left Dangote’s locally produced products largely unsold.
In an affidavit filed in court, Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, explained that the continued importation of AGO and Jet-A1 fuel into the country has made it difficult for Dangote to sell its products, despite having invested billions of dollars into the refinery.
Hashem also pointed out that NMDPRA has threatened to impose an additional 0.5% levy on Dangote’s petroleum products, even though the refinery operates within a Free Zone, which should exempt it from such levies.
“The very purpose of establishing Free Zones is to attract investment by offering tax and regulatory incentives,” Hashem stated.
“Yet, NMDPRA is imposing levies that go against the law and hurt our operations.”
Dangote Refinery has also accused international oil companies and local interests of conspiring with the defendants to prevent the success of Nigeria’s first privately-owned refinery.
The refinery claims that certain interests, both local and international, are unhappy that Nigeria has a refinery capable of solving the country’s energy crisis and reducing its dependence on fuel imports.
“There is a coordinated effort to undermine the success of Dangote Refinery,” said Hashem.
“These import licenses are part of a broader conspiracy to keep Nigeria dependent on foreign imports and prevent the refinery from operating to its full potential.”
Dangote Refinery’s legal team is asking the court to issue an injunction that would prevent NMDPRA from issuing or renewing any further import licences to the six companies named in the lawsuit.
They also want the court to prevent NMDPRA from imposing the additional 0.5% levy on the refinery’s products.
In addition, Dangote is seeking a court order to seal off all storage facilities and tank farms used by the defendants to store imported petroleum products.
“The continued issuance of these import licences is jeopardizing our client’s multibillion-dollar investment,” Onoja said in his argument to the court.
“The intervention of this court is critical to stopping these violations.”
Court Proceedings
At the last hearing of the case, the court was informed that there might be an opportunity for an out-of-court settlement between the parties.
George Ibrahim, counsel for Dangote, told Justice Inyang Ekwo that discussions were ongoing between the refinery and the defendants.
“My lord, there have been developments in the matter, and the parties are now discussing possible terms of settlement,” Ibrahim said.
He requested an adjournment to allow time for further negotiations.
Justice Ekwo granted the request and adjourned the case to January 20, 2025, for the parties to report back on the outcome of the settlement talks.
