- Dangote Refinery sues NMDPRA over import licenses, seeking N100 billion in damages for alleged violation of the Petroleum Industry Act.
- FCCPC seeks to join the lawsuit, citing concerns about monopoly and anti-competitive practices in the petroleum sector.
- Dangote argues its lawsuit aims to boost local refining, not create a monopoly, and dismisses FCCPC’s involvement.
Dangote Petroleum Refinery and the Federal Competition and Consumer Protection Commission (FCCPC) have engaged in a legal dispute over a N100 billion lawsuit. The refinery accuses others of monopolistic practices in Nigeria’s oil and gas sector.
The lawsuit, FHC/ABJ/CS/1324/2024, seeks to void the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) import licenses. NMDPRA granted these licenses to Nigerian oil companies like the Nigerian National Petroleum Company Limited (NNPCL), Matrix Petroleum Services Limited, and A.A. Rano Limited. Dangote Refinery argues that these companies should not import petroleum products like Automotive Gas Oil (AGO) and Jet Fuel, as domestic production already meets local demand.
Dangote filed the lawsuit in September 2024 and first mentioned it in October. The refinery claims that NMDPRA violated the Petroleum Industry Act (PIA). According to Dangote, Section 317(8) and (9) of the PIA only allows issuing import licenses when a proven shortfall in supply exists. The refinery seeks N100 billion in damages for NMDPRA’s continued issuance of these licenses.
Three oil companies—Matrix Petroleum Services, A.A. Rano Limited, and AYM Shafa Limited—have filed a motion to dismiss the suit. They argue that only NMDPRA and NNPCL can determine whether a shortfall in petroleum products exists, not Dangote Refinery.
NNPCL’s legal counsel, Ademola Abimbola, SAN, filed a preliminary objection. He claims that Dangote mistakenly sued the non-existent “Nigeria National Petroleum Corporation” instead of the correct “Nigerian National Petroleum Company Limited.” Abimbola further argues that NMDPRA has no obligation to restrict import licenses unless the Backward Integration Policy applies.
Dangote’s legal team, led by Dr Ogwu James Onoja, SAN, and George Ibrahim, SAN, counters that the case centres on NMDPRA’s “disobedience” of the PIA. They have urged the court to reject NNPCL’s objection.
The case has reached Justice Inyang Ekwo, with the next hearing scheduled for February 5, 2025.
On January 5, 2025, the FCCPC filed a motion to join the lawsuit as a “co-defendant.” The FCCPC claims that the case could significantly impact anti-competition concerns in the petroleum sector. The commission worries that Dangote’s actions could lead to a monopoly.
FCCPC’s legal counsel, Barrister Olarenwaju Osinaike, argues that the case raises issues of monopoly and anti-competition. He claims that Nigeria’s free-market economy allows multiple participants in the petroleum sector. According to the FCCPC Act, the commission must prevent anti-competitive practices.
FCCPC has warned that Dangote Refinery could dominate the production and distribution of petroleum products in Nigeria if the refinery wins the case. The commission argues that this outcome would restrict competition in the market.
In response, Dangote Refinery rejects FCCPC’s claims. The refinery insists that its lawsuit does not aim to create a monopoly. Instead, it seeks to strengthen local refining of petroleum products. Dangote’s legal team maintains that NMDPRA granted the refinery a license to import, produce, and refine products under the PIA.
Dangote’s lawyers argue that NMDPRA should only issue import licenses when local production shortages exist, as stipulated in Sections 317(8) and (9) of the PIA. They stress that the FCCPC has no jurisdiction in this case, as it concerns the PIA, an Act of the National Assembly.
The refinery’s legal team has called the FCCPC a “meddlesome interloper” and argues that the commission should seek to amend the law if it has concerns. They further state that the FCCPC has no role in issuing licenses or imposing levies on the refinery.
The court will rule on FCCPC’s request to join the case as the proceedings continue. The decision could significantly affect the oil and gas industry, especially concerning regulatory authority and market competition.
Key Developments:
- The FCCPC has sought to join the case, citing concerns over monopoly and anti-competitive practices.
- Dangote Refinery insists its lawsuit aims to strengthen local production, not create a monopoly.
- Africa’s richest man, Aliko Dangote, has expressed interest in selling the refinery amid ongoing regulatory disputes.
The outcome of this case could reshape Nigeria’s oil and gas sector, particularly in regulatory oversight and the future of local refining.