The Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (FZE) has taken legal action against the Nigerian National Petroleum Corporation Limited (NNPC) and six other entities, seeking the nullification of import licenses granted to them for bringing refined petroleum products into the country.
The lawsuit, filed at the Federal High Court in Abuja, is also seeking N100 billion in damages from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for allegedly continuing to issue these licenses, despite no shortfall in domestic production of refined petroleum products.
The case, marked FHC/ABJ/CS/1324/2024, lists as defendants the NNPC, NMDPRA, and six companies, including AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
In the suit, Dangote Refinery claims that the continued issuance of licenses to these entities to import products such as Automotive Gas Oil (AGO) and Jet-A1 fuel (aviation turbine fuel) is unjustified, as its refinery produces enough to meet local demand. The company argues that these actions are hurting its business, which has invested billions of U.S. dollars into its refinery operations.
According to Dangote Refinery, “the production of AGO and Jet-A1 exceeds the current daily consumption of petroleum products in Nigeria.”
The plaintiff contends that the issuance of these licenses undermines its ability to operate efficiently in the Nigerian market.
The refinery is calling for the court to restrain NMDPRA from further issuing or renewing import licenses to the listed companies or any other entities. It is also seeking an order directing the sealing off of all storage facilities and tank farms used by these companies for storing refined petroleum products imported into Nigeria.
The plaintiff’s counsel, led by Senior Advocate of Nigeria (SAN) Ogwu Onoja, is also seeking general damages of N100 billion against NMDPRA for what it calls “persistent issuance of licenses” that have harmed the refinery’s business.
Dangote Refinery alleges that these licenses should only be granted in situations where there is a verified shortfall in domestic production, which the plaintiff argues is not currently the case.
Furthermore, Dangote Refinery is challenging the imposition of a 0.5% levy by the NMDPRA, meant for off-takers and wholesalers of petroleum products, as well as a 0.5% wholesale levy for the Midstream Downstream Gas Infrastructure Fund (MDGIF). The plaintiff insists that as a Free Zone Enterprise, it is exempt from these charges under Nigerian law.
“A declaration that by the provisions of the Nigerian Export Processing Zone Act (NEPZA), Companies Income Tax Act, and Dangote Industries Free Zone Regulation 2020, the plaintiff is exempted from all federal, state, and local government taxes, levies, and rates,” the plaintiff argued, adding that any attempt to impose additional levies is unlawful.
In his affidavit, Ahmed Hashem, Group General Manager of Government and Strategic Relations at Dangote Refinery, expressed frustration that NMDPRA’s actions were “crippling” the refinery’s business, leaving its products largely unpatronized despite the substantial investment made.
Hashem also accused the regulatory authority of siding with international oil companies and other business interests, who he claimed are dissatisfied with the establishment of an indigenous refinery capable of addressing Nigeria’s energy crisis.
Hashem added that the intervention of the court is necessary to “stem the incessant violation of statutory provisions by the NMDPRA in favor of other entities.”
In response, Ibrahim George, SAN, representing Dangote Refinery, informed the court on Monday that discussions to resolve the dispute outside of court were underway. He noted that the defendants had indicated their willingness to explore an amicable settlement.
Justice Inyang Ekwo, presiding over the case, subsequently adjourned the matter until January 20, 2025, for a report on the settlement.
The case underscores the ongoing tension between local refining capacities and the Nigerian government’s regulatory framework, as the country navigates the complexities of its downstream petroleum sector.
Should the matter proceed to trial, it could have significant implications for the future of petroleum importation in Nigeria and the role of indigenous refineries like Dangote’s in meeting domestic demand.