Olufemi Adeyemi
The oil marketers respectfully request the Federal High Court in Abuja to dismiss Dangote's assertions, emphasizing the significance of competitive practices in ensuring the economic prosperity of Nigeria and the long-term viability of the oil industry.
AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited have submitted a motion to dismiss a legal action initiated by Dangote Petroleum Refinery and Petrochemicals, which disputes the issuance of import licenses to the aforementioned companies.
In the lawsuit, identified as FHC/ABJ/CS/1324/2024, Dangote Refinery previously sought N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for granting import licenses to certain marketers and permitting the importation of petroleum products.
The marketers involved include NNPC Ltd, Matrix Petroleum Services Limited, AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, and 2015 Petroleum Limited.
In a suit filed on September 6, 2024, the attorney for the plaintiff, Ogwu Onoja, requested the court to rule that NMDPRA has allegedly breached Sections 317(8) and (9) of the Petroleum Industry Act by issuing licenses for the importation of petroleum products.
Dangote Refinery contended that such licenses should only be granted in situations where there is a shortage of petroleum products. The refinery also called on the court to declare that NMDPRA has failed in its statutory duties under the Petroleum Industry Act (PIA) by not promoting local refineries like Dangote Refinery.
However, in a counter affidavit labeled FHC/ABJ/CS/1324/2024, dated November 5 and submitted by Ahmed Raji (SAN), the marketers reiterated their request for the court to dismiss Dangote Refinery's claims, emphasizing the importance of competitive practices for Nigeria's economic stability and the oil sector's health.
The defendants contend that they are entirely eligible to obtain an import license from NMDPRA, as stipulated in Section 317(9) of the PIA.
They assert that the plaintiff is attempting to monopolize Nigeria's petroleum sector, aiming to gain exclusive control over supply, distribution, and pricing.
The marketers expressed that such a move would exacerbate the already fragile state of the nation's economy, leading to significant hardship for Nigerians, which they believe would create a precarious situation for the country.
They warned that if Nigeria were to concentrate all its energy resources by halting the importation of petroleum products and permitting the plaintiff to be the exclusive producer and supplier, with the authority to set prices, the cost of petroleum products would inevitably increase, jeopardizing the nation's energy security.
They highlighted that any disruption in the plaintiff's production capabilities could plunge Nigeria into an energy crisis, as the country lacks sufficient reserves to sustain itself for even 30 days while it arranges for the importation of refined products.
Furthermore, they pointed out the absence of credible evidence demonstrating that the plaintiff can adequately refine and supply the necessary petroleum products for the daily consumption of Nigerians, which they believe poses a significant risk to the energy sector.
The defendants also informed the court that granting the plaintiff's requested reliefs would effectively leave Nigeria and its citizens vulnerable to the plaintiff's control over the availability and pricing of petroleum products.
In their response, they reiterated their qualifications for receiving the import licenses issued by the first defendant, asserting that they have fulfilled all legal criteria necessary for the issuance of these licenses prior to their approval.
The import licenses that were lawfully and validly granted to the defendants did not adversely affect the plaintiff's business or its refinery in any manner.
The marketers informed the court that the import licenses issued to the defendants by the first defendant comply with the stipulations of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other applicable regulations.
Justice Ekwo has scheduled a date of 20 January 2025 for a report on settlement or service.
Background
Recently, the Dangote Group has been in conflict with NNPC, petroleum regulators, and several private oil companies regarding the management of the petroleum downstream market.
In June, the Dangote Group accused certain international oil companies of undermining the operations of its plant by either withholding crude supplies or providing oil at inflated premiums compared to market rates.
Additionally, the group faced disputes with the NMDPRA, which alleged that the diesel produced by the refinery contained sulphur levels exceeding the permissible limit. The regulator also accused Dangote of attempting to establish a monopoly.
In response to these claims, Aliko Dangote, the head of the Dangote Group, invited lawmakers visiting the refinery to a laboratory on-site, where diesel from the refinery was tested against two different imported samples.
The testing results indicated that the diesel from the refinery had significantly lower sulphur content than the imported samples.
In July, the Federal Executive Council (FEC) instructed NNPC Ltd to collaborate with Dangote refinery and other local refineries to address the ongoing dispute regarding crude oil sales to them.
Under the leadership of President Bola Tinubu, the FEC also mandated that crude oil sales to the refineries be conducted in naira, and that these refineries, situated in Nigeria, should sell their refined products to the domestic market in naira as well.
In October, the Nigerian government formally declared the commencement of crude oil and refined petroleum product transactions in naira, effective from October 1st.
Furthermore, NNPC Ltd has terminated its exclusive purchasing agreement with Dangote Refinery, thereby enabling other marketers to directly procure petrol from the refinery. This development signifies a shift in the market dynamics, as NNPC will no longer be the sole buyer, allowing marketers to engage in direct price negotiations with Dangote Refinery.