The Dangote Petroleum Refinery and Petrochemicals FZE has ignited public debate following the filing of a lawsuit at the Federal High Court in Abuja, challenging the issuance of new licenses for petroleum product imports.
In the suit, referenced FHC/ABJ/CS/1324/2024, the refinery is seeking N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Dangote contends that the authority unlawfully granted import licenses to the Nigerian National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited, and other firms to bring in products such as Automotive Gas Oil (AGO) and Jet Fuel, despite the refinery’s capacity to meet national demand.
The defendants in the suit include the NMDPRA, NNPCL, A.Y.M. Shafa Holdings Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
Represented by a group of lawyers led by Ogwu Onoja (SAN), Dangote contends that the licenses issued to NNPCL and others contravene the Petroleum Industry Act (PIA).
The plaintiff expresses distress, stating that its investments are at risk unless the court intervenes to declare that NMDPRA is not fulfilling its statutory responsibilities under the PIA by encouraging local refineries but instead issuing import licenses for petroleum products.
The plaintiff further alleges a grand conspiracy and concerted effort by International Oil Companies and interests in collaboration with the defendants, who are reportedly displeased with the presence of an indigenous refinery in Nigeria capable of addressing the energy crisis and bolstering the economy.
Dangote seeks an injunction to restrain the NMDPRA from further issuing or renewing import licenses to the other defendants or companies for importing petroleum products. In a supporting affidavit, Dangote states that such licenses should only be issued in the event of a petroleum product shortfall.
It threatens business, Dangote argues
The firm’s Group General Manager of Government and Strategic Relations, Ahmed Hashem, explained in the supporting affidavit that the import licenses granted to other companies by NMDPRA for the importation of AGO and Jet-A1 are adversely affecting the plaintiff’s business, which has received substantial financial investment in billions of US dollars.
Hashem also notes that NMDPRA has threatened to impose and demand a 0.5% levy on the plaintiff on wholesales and off-takers and another 0.5% levy on wholesales to the Midstream and Downstream Gas Infrastructure Fund (MDGIF), contrary to statutory provisions governing levies on transactions within Free Zones.
Hashem stated that the primary goal of establishing Free Zones is to encourage competition, attract foreign investment, and establish tax havens.
Dangote is seeking a court order to stop the NMDPRA from issuing or renewing import licenses to other companies for importing petroleum products.
Reliefs sought by Dangote
In addition to the restraining order against the import licenses of the affected companies, the plaintiff is also seeking the following reliefs:
The plaintiff also wants the court to assert that NMDPRA allegedly violates Sections 317(8) and (9) of the Petroleum Industry Act by issuing licenses to import petroleum products.
A declaration that, according to the provisions of the Nigerian Export Processing Zone Act (NEPZA), Companies Income Tax Act (CIT Act), Dangote Industries Free Zone Regulation 2020, and the Finance Act, the plaintiff, as a Free-Zone Enterprise, is exempted from all federal, state, and local government taxes, levies, and other rates.
A declaration that it is against the NEPZA Act, CIT Act, Finance Act, and Dangote Industries Free Zone Regulation 2020, as well as legislative intent, for the 1st Defendant to impose or threaten to impose an additional financial obligation of a 0.5% levy, meant for off-takers of petroleum products directly and an additional 0.5% wholesale levy in favour of the Midstream Downstream Gas Infrastructure Fund (MDGIF) on the plaintiff.
An order of mandatory injunction directing the 1st Defendant to immediately withdraw all import licenses issued to the 2nd-7th defendants and companies other than the plaintiff and other local refineries for importing refined petroleum products into Nigeria.
An order of injunction restraining the 1st Defendant from imposing and demanding a 0.5% levy meant for off-takers of petroleum products directly and an additional 0.5% wholesale levy in favour of MDGIF or any other levy or sum against the plaintiff.
What happened in court?
At the mention of the cas on Monday, plaintiff’s lawyer, George Ibrahim (SAN) told the court that there were moves to settle the case out of court.
Ibrahim said:“My lord, there is a development in this matter, which the lead counsel, James Onoja (SAN), has asked me to bring to the court’s attention.
“At the time we were trying to serve the originating summons on the defendants, they (parties) started discussing.”
Ibrahim then, prayed the court for an adjournment to enable parties explore the settlement option.
He suggested the court should adjourn for either a possible report of settlement or a report of service.
Ruling, Justice Inyang Ekwo further proceedings till January 20, 2025.
Nigerians react
The development has sparked mixed reactions as many claimed Dangote, Africa’s richest man hates competition and trying to monopolised the oil sector. Others commended him, saying its a fight against the ‘Oil Mafias’ in the country.
Sir_Hawkins, an X user tweeting as @shehu_rufa said; “Dangote is a business that has benefited more from nigeria than Nigerians has benefited from him. His refinery didn’t bring us any sort of relief or what so ever. He should go about his businesses d way he deems fit.”
@oluko_iwe wrote; “Dangote wants to enjoy monopoly by being the sole refiner. That wouldn’t work in the oil sector. 😕 He should be ready to compete decently.”
@AmosBulus16 reacted; “Dangote has impoverished Nigeria and Nigerians than improving the Economy of Nigeria. There is nothing of benefit from Dangote to host country Nigeria as other companies in other parts of the world. Cement has become out of the reach of a common man in this era, Petrol has worsen.”
@Dejite03 said; “In this, Dangote is right. However, he can not stop others from doing their business. In the end, Nigerians will bear the brunt instead of enjoying lower prices.”
@Benjaminxx commented; “Why import when you have sufficient local production? I don’t really understand this country. Sourcing of Forex and depleting reserves with high exchange rate will lead to high cost of importation which will fall on the end users.”
NMDPRA not aware
The NMDPRA spokesperson, George Ene-Ita, speaking on the development said the body was not aware of the lawsuit and has not received any summons on the case.
George, who responded via a telephone chat, said, “Well, the authority hasn’t been served any summons on this matter.”
Also, NNPCL spokesperson, Femi Soneye, responded with a WhatsApp sticker that read, “Eziokwu”, when our correspondent sought to get the national oil firm’s reaction on the issue.
However, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, noted that the Petroleum Industry Act permitted the NMDPRA to issue fuel import licenses to qualified companies.
He said, “The matter is already in court and so it becomes subjudice to even analyse the case. But on a general note, we have a Petroleum Industry Act of 2021 and NMDPRA is mandated by law to issue import licenses to qualified companies.
“The worst case scenario is that the Central Bank of Nigeria will say they don’t have foreign exchange to give them, so if they have a way of working out trading values, the company is allowed to import products into Nigeria.
“The more products we have from different sources, the easier Nigerians can have products available and at affordable prices.”
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said he was not aware that any marketer was sued by Dangote for importing fuel.
However, he said the market was now open following the removal of subsidies.
“I am not aware whether Dangote sued some marketers for importing petroleum products. This is a liberalised marketer. The market is now free. Marketers who might source can do so if their landing cost is cheaper. Now that the government is no more paying subsidies, we should allow for free trade – willing buyer, willing seller relationship.
“Those things that people are saying are rumours. Dangote has not sued anyone. Dangote is still maintaining his pact with NNPC and he is not ready to sell to any other person until that pact is removed,” Ukadike stated.
Dangote withdraws suit against NNPCL, others
The Dangote Group has withdrawn a suit seeking the award of N100 billion in damages against the NMDPRA for allegedly proceeding to issue import licenses to the NNPCL and other companies.
The Group’s Chief Branding and Communications Officer, Anthony Chiejina, said the company would withdraw the matter by the adjourned date in January.
He said the matter was an old issue that started in June and culminated in a matter being filed in September 6.
“Currently, the parties are in discussion since the President Bola Tinubu’s directive on crude oil and refined products sales in naira initiative, which was approved by the Federal Executive Council (FEC),” he said.
“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 agreed to put a halt to the proceedings.
“It is important to stress that no orders have been made and there are no adverse effects on any party. We understand that once the matter comes up January 2025, we would be ina position to formally withdraw the matter in court.”