Dangote Refinery Sues NNPCL, NMDPRA Over Import Licenses

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Dangote Petroleum Refinery and Petrochemicals has filed a lawsuit at the Federal High Court in Abuja, seeking to invalidate import licenses issued to the Nigerian National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited, A. A. Rano Limited, and four other companies.

In the suit, numbered FHC/ABJ/CS/1324/2024, Dangote Refinery is seeking N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), claiming the agency has continued to issue import permits for products such as Automotive Gas Oil (AGO) and Jet-A1 (aviation turbine fuel) despite Dangote’s ability to meet the country’s consumption needs.

It argues that these licenses are unnecessary, as it already produces sufficient refined petroleum products to meet Nigeria’s demand while it similarly asked the court for an injunction preventing NMDPRA from issuing or renewing import licenses to the named companies. Additionally, the refinery seeks an order to seal all storage facilities used for imported petroleum products by the defendants.

Among the other reliefs requested is a declaration that Dangote Refinery, as a Free-Zone Enterprise, is exempt from federal, state, and local taxes, levies, and other charges in addition to a declaration that imposing a 0.5 per cent levy on off-takers of petroleum products and an additional wholesale levy violates the Nigerian Export Processing Zone Act (NEPZA), the Companies Income Tax Act, and other regulations.

Defendants in the case include NMDPRA, NNPCL, Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.

In the court documents dated September 6, 2024, Dangote’s legal counsel, Ogwu James Onoja argued that NMDPRA is violating Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing import licenses in the absence of a product shortfall. He called for the court to declare that NMDPRA is not fulfilling its legal obligations to support local refineries like Dangote

Ahmed Hashem, Group General Manager of Government and Strategic Relations at Dangote Refinery stated in an affidavit that the import licenses are undermining Dangote’s business, which has invested billions of dollars in production. Hashem noted that Dangote’s petroleum products are largely ignored, while the NMDPRA allegedly facilitates unfair competition.

The refinery also claims NMDPRA threatened to impose a 0.5 per cent levy on its wholesale operations and an additional 0.5 per cent levy on the Midstream and Downstream Gas Infrastructure Fund (MDGIF). The refinery argues that these levies are contrary to regulations governing Free Zones, which are meant to promote competition and attract investment.

Hashem further alleged that international oil companies and other interests are conspiring with the defendants to undermine Nigeria’s first indigenous refinery, which could solve the country’s energy crisis.

Recall at a recent court session before Justice Inyang Ekwo, George Ibrahim SAN, representing the plaintiff, informed the court that the parties are exploring an out-of-court settlement. As a result, the court adjourned the case until January 20, 2025, for an update on the settlement discussions.

This lawsuit follows recent tensions between Dangote and regulatory authorities. Aliko Dangote, Africa’s richest man, had earlier expressed interest in selling his multibillion-dollar refinery to NNPCL, citing disputes with regulatory bodies and equity partners. Dangote has also previously criticized the importation of substandard petroleum products into Nigeria.

In a related development, the federal government recently granted marketers the license to buy petroleum products directly from the Dangote Refinery, following NNPCL’s decision to step back from acting as an intermediary.