Dangote Petroleum Refinery and Petrochemicals has filed a lawsuit in the Federal High Court in Abuja against the Nigeria Midstream and Downstream Petroleum Regulatory Authority as well as a few significant oil and gas importers.
Dangote Refinery sued NMDPRA in suit number FHC/ABJ/CS/1324/2024, claiming N100 billion in damages for granting licenses to import refined goods such automotive gas oil and jet-A1 (aviation fuel).
Dangote asserted that imports were unneeded because the refinery’s output exceeded levels of domestic consumption.
Oil marketers, however, reacted to this by emphasizing that the market was deregulated and that dealers could import the goods or purchase from the $20 billion refinery located in Lekki.
Additionally, Dangote requested that the import licenses given to A. A. Rano Limited, Matrix Petroleum Services Limited, Nigerian National Petroleum Corporation Limited, and four other companies be revoked.
NMDPRA, NNPCL, AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited were also added as defendants in the lawsuit.
By flooding the market with refined products it already produced without shortages, the refinery claimed that these imports undermined its operations.
Dangote, the complainant, argued that by granting import licenses in the absence of any proof of product shortages, NMDPRA had broken provisions of the Petroleum Industry Act. Dangote charged that the regulator was not fulfilling its mandate to support regional refineries.
The importation of AGO and Jet-A1 has caused disruptions to the refinery’s commercial operations, leaving its goods largely unsold, according to an affidavit by Ahmed Hashem, General Manager, Government and Strategic Relations, Dangote refinery.
The “plaintiff is considerably distressed, and its business activities and investments are being jeopardized and may get worse by the day unless the Honourable Court intervenes,” according to the affidavit.
The Dangote refinery further asserted that, in violation of free zone regulations, NMDPRA threatened to impose a 0.5% fee on wholesale buyers and off-takers in addition to a 0.5% levy for the Midstream and Downstream Gas Infrastructure Fund.
The refinery contended that these taxes went against the goals of free zones, which were to promote competition and draw in foreign capital.
International oil corporations and the defendants were also charged in the lawsuit with plotting to thwart Nigeria’s domestic refining initiatives.
It stated that “these companies and entities have been sponsoring the media to come up with all sorts of stories and untrue statements and are doing everything in their power to sabotage the plaintiff’s operation.”
According to the Companies Income Tax Act, the Nigerian Export Processing Zone Act, and other pertinent regulations, the refinery also requested a court ruling stating that it was exempt from all federal, state, and local taxes.
When the First Defendant granted licenses to other businesses to import petroleum products into Nigeria when there was no shortage in local production, it was in violation of its statutory role and responsibility under the PIA to support local refineries like the Plaintiff.
“A Declaration that the Plaintiff, as an entity duly registered as a Free-Zone Enterprise, is exempt from all federal, state, and local government taxes, levies, and other rates under Section 8(1) of the Nigerian Export Processing Zone Act (NEPZA), Sections 23(h) and 55(1) of the Companies Income Tax Act (CIT Act), paragraph 6 of the Second Schedule to the CIT ACT, Regulations 54(2)(a)(i) of the Dangote Industries Free Zone Regulation, 2020, and the Finance Act.”
The Dangote refinery asked the court to revoke all of the companies’ current import licenses, close off their tank farms, storage facilities, and stations, and prevent NMDPRA from granting any more import licenses to the listed businesses.
“An order voiding or setting aside import licenses issued to the second through seventh defendants for the purpose of importing refined petroleum products already being produced by the plaintiff without shortfalls” is one of the orders the court is requesting.
“A court order directing the first defendant to prevent the second through seventh defendants from using any tank farms, storage facilities, warehouses, or stations to store any refined petroleum products being imported into Nigeria.”
Dangote’s attorney, George Ibrahim SAN, told Justice Inyang Ekwo during a hearing on Monday that the parties were considering a potential settlement.
In response to his plea for a delay to facilitate additional conversations, the judge set a deadline of January 20, 2025, for a report on the settlement or summons service.
NMDPRA is unaware
George Ene-Ita, the NMDPRA spokesperson, stated when contacted that the organization was unaware of the litigation and had not been summoned regarding it.
“Well, the authority hasn’t been served any summons on this matter,” George replied in a phone conversation.
Additionally, when our journalist asked the national oil business for its response on the matter, NNPCL spokesperson Femi Soneye replied with a WhatsApp sticker that said, “Eziokwu.”
But according to Billy Gillis-Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria, the Petroleum Industry Act allowed the NMDPRA to grant gasoline import licenses to eligible businesses.
“It becomes subjudice to even analyze the case because the matter is already in court,” he stated. However, generally speaking, the Petroleum Industry Act of 2021 requires NMDPRA to grant import licenses to eligible businesses.
In the worst situation, the Central Bank of Nigeria will claim that they are out of foreign exchange. In this circumstance, the corporation is permitted to import goods into Nigeria as long as they have a method for calculating trading values.
“It is easier for Nigerians to have access to products at reasonable prices the more products we have from various sources.”
According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, he was unaware that Dangote had filed a lawsuit against any marketer for importing petroleum.
However, he claimed that after the subsidies were eliminated, the market was now open.
“I don’t know if Dangote brought legal action against certain marketers for bringing in petroleum items. This marketer is liberalized. Now the market is open. In the event that their landing cost is lower, marketers who may source can do so. We should permit free trade—a partnership between a willing buyer and a willing seller—now that the government is no longer providing subsidies.
“Those statements made by others are rumors. No one has been sued by Dangote. According to Ukadike, Dangote is still upholding his agreement with NNPC and is not prepared to sell to anybody else until it is broken.
Sources at the Dangote refinery, meanwhile, claimed that the business had already suspended action on the case because it was overrun by recent events.
Speaking on condition of anonymity because he was not authorized to discuss the issue, one of the sources informed one of our correspondents that the case was being circulated to give the impression that it had just been filed.
“This case is not new; the company has already stayed action on it, and events have taken precedence over it. According to one of the sources, there is no need for concern.
According to a different source, the case was filed in the midst of the difficulties that greeted the refinery’s production start a few weeks ago.
“The situation is already shifting. Things are improving. That case is therefore not novel. They are merely spreading it to give the impression that it is new,” the source stated formally.
Additionally, the Dangote refinery denied reports that it sued NNPCL, NMDPRA, and other marketers to cancel their licenses in order to halt the importation of fuel.
This was because it stated that in January of next year, a procedure to start the formal withdrawal of the lawsuit would begin.
Anthony Chiejina, the Group’s Chief Branding and Communications Officer, revealed these facts in a statement on Monday.
The Dangote representative responded by saying that the lawsuit was not new and that it started with a problem in June and ended with a file on September 6, 2024.
He added that the court will withdraw the case since events, such as the naira for crude sales, had surpassed the progress.
The parties were presently in talks in response to President Bola Tinubu’s directive regarding the sale of crude oil and refined products in naira, according to the statement titled “No Fresh Case Filed Against NNPCL, others.”
“This is an old issue that began in June and culminated in a matter being filed on September 6, 2024,” the statement said.
“Since the Federal Executive Council approved President Bola Tinubu’s directive on the sale of crude oil and refined products in the Naira Initiative, the parties are currently in discussion.”
“We have made tremendous progress in that regard and events have overtaken this development.
“No party has been served with court processes and there is no intention of doing so. We have decided to stop the proceedings.
It is crucial to emphasize that no directives have been issued and that no party will suffer any negative consequences. We are aware that we will be able to formally withdraw the case from court whenever it is brought up in January 2025.
Petroleum marketers, meantime, were taken aback by the case and stated that no legislation forbids the importing of petroleum products, regardless of the quantity of locally refined goods.
Due to the delicate nature of the issue, a few of the marketers, who also spoke on condition of anonymity, asked to view the original summons before commenting.
As far as I’m aware, Nigerian law does not prohibit the importing of fuel, regardless of the availability of sufficient refining capacity. However, until I examine the court documents, I am unable to discuss this matter.
Another marketer pointed out that preventing marketers from importing fuel would violate the Petroleum Industry Act, stating that “the case is dead on arrival.”
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