A legal battle is brewing in Nigeria’s petroleum sector, pitting the Dangote Petroleum Refinery and Petrochemicals FZE against the regulatory authority and several major oil marketers. The dispute centers on the issuance of oil import licenses, with Dangote Refinery seeking to restrict imports and consolidate its position in the newly liberalized market. The case, filed at the Federal High Court in Abuja, has been adjourned until January 30, 2025, to allow for the amendment and proper service of court documents.
Dangote Refinery, in its suit, argues that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) violated the Petroleum Industry Act (PIA) by granting import licenses to the Nigerian National Petroleum Corporation Limited (NNPCL) and five other oil marketing companies. The refinery contends that the PIA mandates prioritizing local refineries and that import licenses should only be issued when domestic supply falls short. Furthermore, Dangote Refinery is seeking N100 billion in damages from the NMDPRA, alleging that the continued issuance of import licenses undermines its investment and contravenes the spirit of the PIA.
The defendant oil marketers, namely AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited, have vehemently opposed Dangote Refinery’s claims. They argue that Dangote Refinery’s current production capacity is insufficient to meet Nigeria’s daily petroleum needs. Granting Dangote Refinery’s request, they assert, would create a monopoly, stifling competition and potentially leading to price hikes and economic instability. They maintain that their import licenses were legally obtained and comply with all relevant regulations, including the PIA and the Federal Competition and Consumer Protection Act.
The marketers also raise concerns about the potential risks of relying solely on Dangote Refinery for the nation’s petroleum supply. They highlight the possibility of supply disruptions and price volatility in the event of operational issues at the refinery. They argue that a diversified supply chain, including imports, is crucial for ensuring stable and affordable petroleum products for Nigerian consumers. They warn that granting Dangote Refinery exclusive control over the sector would be detrimental to the national economy.
The legal proceedings have been marked by procedural issues, leading to the adjournment. The plaintiff’s counsel, George Ibrahim (SAN), sought leave to amend the originating summons, citing errors in the initial filing. This amendment, which involved correcting the registered name of the NNPCL, required re-serving the defendants. The court, presided over by Justice Inyang Ekwo, granted the adjournment to ensure all parties receive the amended documents and have the opportunity to respond accordingly.
The adjournment also allows for the resolution of a pending application by another party seeking to join the suit. Represented by Olanrewaju Oshinaike, this unnamed party’s request has been temporarily put on hold until the service of the amended summons is completed. This underscores the growing interest in the case and its potential implications for the Nigerian petroleum sector. The court has emphasized the need for the plaintiff to ensure all procedural matters are resolved before the next hearing, indicating its intent to expedite the proceedings once the preliminary issues are addressed.
The outcome of this legal battle holds significant implications for the future of Nigeria’s downstream petroleum sector. It will determine the balance between promoting local refining capacity and maintaining a competitive market that safeguards consumer interests. The court’s decision will set a precedent for the interpretation of the PIA and its provisions regarding import licenses and the role of local refineries. The case also raises broader questions about competition policy and the potential risks of monopolies in strategic sectors like the petroleum industry. The legal arguments presented by both sides reflect the complex challenges and competing interests at play in Nigeria’s ongoing efforts to reform and liberalize its energy sector.
