Oil marketers seek dismissal of Dangote Refinery’s lawsuit over petroleum import licenses

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

In a counter affidavit dated November 5, 2024, the marketers argue that supporting Dangote’s bid to limit the issuance of petroleum import licenses could destabilize Nigeria’s oil sector.

The lawsuit, initially filed by Dangote Refinery on September 6, 2024, accuses the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Corporation (NNPC), along with several oil marketers, of violating Sections 317(8) and (9) of the Petroleum Industry Act (PIA).

Dangote’s refinery claims that NMDPRA issued import licenses improperly, without proving a product shortfall, and is urging the court to declare these actions in contradiction with the responsibilities outlined in the PIA. The refinery argues that NMDPRA has not sufficiently promoted local refineries, such as Dangote’s, in line with its mandate.

However, in their counter statement, Shafa, A. A. Rano, and Matrix Petroleum defend their right to hold import licenses, emphasizing that Dangote Refinery’s production capacity is insufficient to meet the country’s daily petroleum demand.

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They argue that Dangote has not provided evidence to support its claims of adequate supply and that they have fully complied with the legal requirements set out by NMDPRA under Section 317(9) of the PIA to obtain their import licenses.

The marketers warn that allowing Dangote Refinery to monopolize the oil sector could have detrimental effects on Nigeria’s economy and the broader petroleum market.

They contend that a balanced approach, which includes both local refining and petroleum importation, is essential for maintaining stability in the country’s energy sector.

“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.”