Dangote Challenges Issuance Of Petrol Import Licenses

Dangote Challenges Issuance Of Petrol Import Licenses, the Dangote’s Refinery is facing downtime in Nigeria’s oil sector where entrenched interest and corruption is debilitating development.

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Billionaire businessman and owner of the Dangote refinery,Alhaji Aliko Dangote,has has challenged the issuance of petrol import licences to marketers and the Nigerian National Petroleum Company Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The NMDPRA has  recently approved licences for the importation of over 700,000 metric tonnes of petrol despite claims that the Dangote refinery now supplies more than 90 per cent of the nation’s daily PMS consumption.

The Dangote refinery had take the issue to court, dragging the Attorney-General and the NNPC before the court, asking it to void import permits granted by the NMDPRA to fuel importers, arguing that the licences violated existing regulations and an earlier court order to maintain the status quo.

Dangote Challenges Issuance Of Petrol Import Licenses

Dangote also accused the NNPC and others of sabotaging the $20bn investment, especially by denying it crude supplies and resorting to fuel importation when it has the capacity to produce what the country needs in terms of petrol, diesel, and others.

NNPC Respond

In response,the NNPC said it would raise a preliminary objection challenging the competence of the suit and the refinery’s locus standi.

The state oil company declared that Dangote refinery’s petroleum products were already expensive and subject to price swings dictated by commercial interests.

“The plaintiff’s petroleum products are already sold at significantly high and fluctuating market prices, dictated by its commercial interests,” the company said.

NNPC accused the refinery of forum shopping, saying, ”The institution of multiple actions by the plaintiff in respect of substantially the same subject matter and reliefs constitutes an abuse of court process and amounts to forum shopping.

Dangote Challenges Issuance Of Petrol Import Licenses

”The company argued that the Dangote refinery had earlier filed a similar action before the Abuja Judicial Division of the Federal High Court in Suit No FHC/ABJ/CS/1324/2024 against the NMDPRA and six others over import licences and levies before later withdrawing the case and instituting another action in Lagos.

NNPC argued that there was no evidence showing the refinery could independently satisfy Nigeria’s petroleum product demand.

“There is no credible, independent, or verifiable evidence before this honourable court establishing that the plaintiff presently satisfies the petroleum product demands of Nigeria,” NNPC argued.

The national oil company added that the refinery failed to provide verified evidence establishing the country’s actual daily consumption needs or proof of its ability to guarantee an uninterrupted nationwide supply.

Dangote Challenges Issuance Of Petrol Import Licenses

“The plaintiff has failed to place before this Honourable Court any comprehensive or independently verified evidence establishing the actual daily national consumption rate of petroleum products in Nigeria or the plaintiff’s ability to guarantee uninterrupted nationwide petroleum supply independently,” it  said.

NNPC also argued that the refinery’s production claims were insufficient to justify restricting imports.

“The plaintiff’s alleged production figures are selective, incomplete, and incapable of establishing nationwide product sufficiency.”it added

The company stressed that fuel supply obligations go beyond refining capacity alone, as they necessarily involve logistics, strategic storage, product evacuation, distribution, haulage, transportation, and strategic reserve management.

Dangote Challenges Issuance Of Petrol Import Licenses

NNPC warned that depending on a single operator for national fuel supply would endanger Nigeria’s energy security.

“Reliance on a single supplier within the petroleum industry poses grave risks to national energy security,” it stated

The company added that restricting imports in the manner sought by the refinery could trigger severe supply crises nationwide.

“Restricting importation channels in the manner sought by the plaintiff would expose Nigeria to severe risks of petroleum shortages, supply disruptions, price instability, distribution failures, and national energy crises,” the affidavit reads Dangote Challenges Issuance Of Petrol Import Licenses

NNPC further told the court that any operational interruption, shutdown, or disruption affecting the Dangote refinery operations in Nigeria would result in severe petroleum shortages if alternative importation and supply channels are eliminated.

The company accused the refinery of attempting to edge out other participants in the downstream supply chain by creating a monopoly.

“The reliefs sought by the plaintiff are aimed at substantially restricting or eliminating other participants within the petroleum importation and supply chain. The grant of the plaintiff’s reliefs would effectively expose Nigeria’s petroleum sector to monopoly control and undermine competitive participation within the industry,” the affidavit stated

NNPC warned the court that a monopoly in the sector would hurt consumers and destabilise the economy by distorting market competition, undermining pricing stability and reducing supply flexibility.

Dangote Challenges Issuance Of Petrol Import Licenses

The company defended the continued issuance of import licences by regulators, insisting they were lawful and necessary for energy security and market stability, saying this does not contravene Section 317(9) of the Petroleum Industry Act, 2021.

The  oil company told the court that Section 317(8) of the PIA merely gave regulators discretionary powers regarding backward integration policy and did not impose a mandatory ban on imports.

“Section 317(9) of the Petroleum Industry Act expressly contemplates the issuance of import licences to companies with active local refining licences or proven track records in international crude oil and petroleum products trading,”

“Section 317(8) of the Petroleum Industry Act merely provides that the Authority may apply a Backwards Integration Policy in the downstream petroleum sector, thereby conferring discretionary powers on the regulatory authorities rather than imposing a mandatory prohibition on petroleum importation,” it added

Dangote Challenges Issuance Of Petrol Import Licenses

NNPC specifically defended the roles of the Nigerian Upstream Petroleum Regulatory Commission and the NMDPRA in the dispute.

“The 2nd Defendant, NMDPRA, NUPRC and other relevant agencies of government have not frustrated the plaintiff in the execution of its business objectives or refinery operations in any manner whatsoever.

NNPC also denied allegations of sabotage and deliberate denial of crude oil supply to the refinery.

“The government and the 2nd Defendant have not deliberately denied the plaintiff a crude oil supply,” the company stated.

Dangote Challenges Issuance Of Petrol Import Licenses

“Contrary to the plaintiff’s allegations, the 2nd Defendant has not sabotaged the plaintiff’s refinery operations.”It added

The company insisted that all actions relating to importation, licensing, supply, and distribution were undertaken strictly in line with the Petroleum Industry Act, market realities, and national interest considerations.

NNPC further argued that the refinery was only one of several operators in the industry and could not override the rights of other participants, saying it is the supplier of last resort.

The latest court battle is the second significant legal confrontation yet between Dangote refinery and major government oil agencies since the commencement of operations at the multibillion-dollar Lekki-based refinery owned by billionaire businessman Aliko Dangote.