Oil Marketers Urge Court to Block Dangote Refinery’s Attempt to Monopolize Nigeria’s Energy Sector

Three major oil marketing companies have petitioned the Federal High Court in Abuja to block what they describe as an effort by Dangote Petroleum Refinery and Petrochemicals FZE to monopolize Nigeria’s energy sector.

The companies—AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—have filed a reply to a lawsuit filed by Dangote Refinery, challenging the legality of their import licenses for refined petroleum products.

In their response, the marketers argue that allowing Dangote Refinery to dominate the oil sector would have detrimental consequences for Nigeria, particularly in terms of price control and energy security. The marketers are challenging the suit filed by Dangote Refinery, which seeks to nullify the licenses issued to them by the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for importing refined petroleum products into the country.

The case, which is being heard under the suit number FHC/ABJ/CS/1324/2024, also involves the Nigerian National Petroleum Corporation Limited (NNPC) and NMDPRA as defendants. Dangote Refinery, in its legal action, has questioned the legality of the licenses issued to the marketers, arguing that NMDPRA violated sections of the Petroleum Industry Act (PIA) by permitting these companies to import petroleum products, despite Dangote’s ability to produce sufficient volumes domestically.

The plaintiff asserts that Dangote Refinery is capable of meeting the daily petroleum needs of Nigeria, producing more than enough AGO (Automotive Gas Oil) and Jet-A1 (aviation fuel) to cover the country’s current consumption, and claims that allowing further importation licenses undermines its operations. The refinery seeks N100 billion in damages from NMDPRA for issuing import licenses to competitors and has requested a court order halting the issuance of further import licenses to these companies.

Dangote’s petition also includes demands for NMDPRA to stop renewing the import licenses of its competitors, close their storage facilities, and withdraw all import permits granted to any companies other than Dangote and other local refineries. The suit further seeks to prevent NMDPRA from imposing certain levies on Dangote.

However, in their response filed on November 5, 2024, the three marketers argue that Dangote does not produce enough refined products to meet Nigeria’s daily consumption and that the court has no evidence to support the contrary. They contend that the import licenses issued to them were fully compliant with the provisions of the PIA and that they are entitled to import petroleum products into the country.

The marketers also warn that granting Dangote’s request would result in a monopoly, which would harm Nigeria’s economy and energy security. They argue that if Dangote is allowed to dominate the market, it would have unchecked control over petroleum product pricing, leading to rising costs for consumers. “If Nigeria puts all her energy eggs in one basket by stopping importation of petroleum products and allowing the Plaintiff to be the sole producer and supplier… energy security will elude Nigeria,” they said in their response.

The marketers also point out that a breakdown in Dangote’s production operations could lead to a national energy crisis, as the country currently does not have sufficient reserves to cover its energy needs in the event of such disruptions. They assert that granting Dangote a monopoly would leave Nigerians at the mercy of a single supplier with no competition to regulate prices.

“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the Plaintiff’s business or its refinery,” the marketers argue, adding that the licenses issued by NMDPRA are in full compliance with relevant laws, including the Petroleum Industry Act (PIA) and the Federal Competition and Consumer Protection Act (FCCPA).

The matter has been adjourned until January 20, 2025, with Justice Inyang Ekwo urging both parties to consider out-of-court settlement options. The court also noted that Dangote Refinery has indicated its willingness to withdraw the suit if an agreement can be reached.