The Nigerian National Petroleum Company Limited (NNPCL) has urged the Federal High Court in Abuja to strike out a lawsuit filed by Dangote Petroleum Refinery and Petrochemicals FZE. The suit challenges the issuance of petroleum import licences by the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to NNPCL and other marketers.
This legal clash centres on the alleged violation of the Petroleum Industry Act (PIA) by granting licences despite Dangote Refinery’s capacity to meet Nigeria’s fuel demands.
Dangote Refinery’s Position
The Dangote Refinery contends that under Sections 317(8) and (9) of the PIA, import licences should only be issued when domestic production falls short of national demand. Claiming no such shortfall exists, the refinery seeks:
- A declaration that the NMDPRA violated the PIA.
- ₦100 billion in damages.
- A court order stopping further issuance of import licences.
The refinery, producing up to 650,000 barrels per day, argues that continued licensing of imports undermines its role as a key supplier in the Nigerian market.
NNPCL’s Counterarguments
In its preliminary objection, NNPCL argues that the lawsuit is legally flawed, claiming:
- The court lacks jurisdiction over the case.
- Dangote Refinery has no legal standing (locus standi) to seek such reliefs.
- The suit fails to disclose a valid cause of action.
NNPCL also challenges the inclusion of its name in the suit, pointing out that the entity named in Dangote’s filing does not exist, as per corporate registration records.
Market Reactions and Allegations
The case has polarised opinions within the industry. Critics argue that Dangote Refinery’s stance seeks to establish a monopoly by limiting competition from importers. Meanwhile, independent marketers insist that importation remains critical to supplement supply gaps, given the country’s daily petrol consumption of approximately 66 million litres.
Supporters of Dangote’s position, however, highlight the financial drain caused by fuel importation estimated at $17 billion annually and the need for a more sustainable domestic production model.
Path Forward
Justice Inyang Ekwo has adjourned the case to 20 January 2025 to allow for possible out-of-court settlements. Both parties are expected to present reports on any progress in negotiations.
Broader Implications
This legal battle underscores the challenges of balancing domestic production and importation in Nigeria’s oil and gas sector. While Dangote Refinery is poised to transform the industry, its role in fully meeting local demand remains uncertain. Conversely, continued importation raises concerns over economic sustainability and foreign exchange management.
The outcome of this case could set a precedent for interpreting the PIA and determining the interplay between local refineries and petroleum importers, shaping the future of Nigeria’s energy landscape.
