Oil marketers seek to dismiss Dangote refinery’s suit

Three oil marketers, AYM Shafa Limited, A.A. Rano Limited and Matrix Petroleum Services Limited, have filed a lawsuit at the Federal High Court in Abuja, requesting the court to dismiss a suit filed by Dangote Petroleum Refinery and Petrochemicals challenging the issuance of import licences to the marketers.

Dangote Refinery, in suit number FHC/ABJ/CS/1324/2024, had earlier requested the court to award N100 billion in damages against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for issuing import licenses to some marketers and allowing the importation of petroleum products.

The marketers are NNPC Ltd, Matrix Petroleum Services Limited, AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, and 2015 Petroleum Limited.

In the suit dated 6 September 2024, the plaintiff’s lawyer, Ogwu Onoja, asked the court to declare that NMDPRA is allegedly in violation of Sections 317(8) and (9) of the Petroleum Industry Act by issuing licenses for the importation of petroleum products.

The Dangote Refinery said such licenses should only be issued in circumstances where there is a petroleum product shortfall. The refinery also urged the court to declare that NMDPRA is in violation of its statutory responsibilities under the Petroleum Industry Act (PIA) for not encouraging local refineries such as Dangote Refinery.

But in a counter affidavit marked FHC/ABJ/CS/1324/2024 dated 5 November, and filed by Ahmed Raji (SAN), the marketers requested that the court dismiss Dangote Refinery’s claims, insisting that competitive practices are essential to Nigeria’s economic health and the oil sector’s viability.

They argued that they are fully qualified to receive an import licence from NMDPRA, in accordance with Section 317(9) of the PIA.

The three defendants claim the plaintiff allegedly seeks to monopolise the petroleum industry in Nigeria, where it alone would control supply, distribution, and pricing.

The marketers said that such an act would further deteriorate the country’s critically ailing economy “and unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity.”

They said 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.

“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.”

They further told the court that granting the reliefs sought by the plaintiff was a design to leave Nigeria and Nigerians at the mercy of the plaintiff with respect to the availability and cost of purchasing petroleum products in the country.

They equally argued in their reply that they are fully qualified to receive the import licences issued to them by the 1st defendant, as they duly met all the legal requirements for the issuance of such import licences, before the same were issued to them.

“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 licences 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,” the marketers told the court.

Justice Ekwo fixed 20 January 2025, for a report of settlement or service.

Background

In recent months, the Dangote Group has been at loggerheads with NNPC, petroleum regulators and some private oil firms over the control of the petroleum downstream market.

In June, the Dangote Group accused some international oil companies of sabotaging the plant’s operations by either refusing to supply crude or offering oil at higher premiums compared to market prices.

It also clashed with the NMDPRA, which claimed diesel from the refiner has sulphur content levels above the allowed threshold. The regulator also accused Dangote of seeking to be a monopoly.

In refuting the allegation, the head of the Dangote Group, Aliko Dangote, took lawmakers visiting the refinery to a laboratory within the plant, where diesel from the refinery was tested alongside two different samples from imports.

The results showed the sample from the refinery’s diesel had much lower sulphur than the imported ones.

In July, the Federal Executive Council (FEC) directed NNPC Ltd to engage Dangote refinery and other local refineries to resolve the dispute over the sale of crude oil to them.

The FEC, presided over by President Bola Tinubu, also directed that such crude oil sales to the refineries be made in naira and that the refineries, located in Nigeria, should also sell their refined products to the Nigerian market in naira.

READ ALSO: UPDATED: Dangote tells NNPC, oil marketers to stop importing petrol, says refinery has enough

In October, the Nigerian government said it had officially commenced the sale of crude oil and refined petroleum products in Naira. The sale in Naira took effect from 1 October, the government said at the time.

PREMIUM TIMES also exclusively reported that NNPC Ltd has ended its exclusive purchase agreement with Dangote Refinery, opening up the market for other marketers to buy petrol directly from the refinery.

This means the NNPC will no longer be the sole off-taker, and marketers can now negotiate prices directly with Dangote Refinery.