The Dangote Petroleum Refinery and Petrochemicals FZE has asked a Federal High Court in Abuja to annul import licenses granted to the Nigeria National Petroleum Corporation Limited (NNPC) and five other companies for importing refined petroleum products.
The additional companies involved are Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
In a suit labeled FHC/ABJ/CS/1324/2024, filed by attorney Ogwu Onoja, SAN, before Justice Inyang Ekwo, Dangote Refinery has named the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and NNPCL as the 1st and 2nd defendants. The other five companies are listed as defendants 3 to 7 in the originating summons dated September 6.
Additionally, the company is seeking N100 billion in damages from NMDPRA, alleging that it improperly continues to issue import licenses to NNPCL and the five companies for importing petroleum products.
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These it said are Automotive Gas Oil (AGO) and Jet Fuel (aviation turbine fuel) into Nigeria, “despite the production of AGO and Jet-A1 that exceeds the current daily consumption of petroleum products in Nigeria by the Dangote Refinery.”
The plaintiff has requested the court to declare that the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is allegedly violating Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing import licenses for petroleum products. The plaintiff contends that such licenses should only be granted in cases of a petroleum product shortfall.
Additionally, the plaintiff seeks a declaration that NMDPRA is failing in its statutory duties under the PIA by not supporting local refineries like Dangote Refinery.
In an affidavit submitted by Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, it is stated that the import licenses issued to other companies by NMDPRA for importing AGO and Jet-A1 are severely harming the plaintiff’s business, which has invested billions of dollars. He noted that the plaintiff’s products are largely neglected due to NMDPRA’s alleged actions.
Hashem also mentioned that NMDPRA has threatened to impose a 0.5% levy on the plaintiff for wholesales and off-takers, as well as another 0.5% levy on wholesales to the Midstream and Downstream Gas Infrastructure Fund (MDGIF), citing a letter dated June 10.
He argued that this is contrary to statutory provisions that restrict the implementation of levies on transactions within Free Zones.
He emphasized that the primary purpose of establishing Free Zones is to promote competition, attract foreign investment, and create tax havens.
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Furthermore, Hashem claimed that there is an alleged conspiracy involving International Oil Companies (IOCs) and other interests, in collusion with the defendants, who are dissatisfied with Nigeria having an indigenous refinery poised to address the ongoing energy crisis and bolster the economy.
“The intervention of the honourable court has become necessary in order to stem the incessant violation of statutory provisions by the 1st defendant in favour of other entities such as the 2nd to 7th defendants,” he stated.
He stated that the plaintiff is experiencing significant distress, with its investment at risk unless the honorable court intervenes.
As a result, Dangote Refinery is seeking an injunction to prevent the 1st defendant from issuing or renewing import licenses to the 2nd through 7th defendants, or any other companies, for the importation of petroleum products.
It sought “general damages in the sum of N100,000,000,000 against the 1st defendant (NMDPRA).”
It also requested a court order directing the NMDPRA to seal all tank farms, storage facilities, warehouses, and stations used by the defendants for storing refined petroleum products imported into Nigeria.
“A declaration that by the provisions of Section 8(1) of the Nigerian Export Processing Zone Act (NEPZA), Sections 23(h) and 55(1) of the Companies
“A.
“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 favor of MDGIF or any other levy or sum against the plaintiff.
When the matter was heard on Monday, George Ibrahim SAN, representing Dangote Refinery, informed the court that the defendants had approached them for reconciliation.
“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 started discussing,” he said.
Mr. Ibrahim requested an adjournment to give the parties time to explore an out-of-court settlement.
He proposed that the court adjourn to allow for either a report on the settlement or a report on service.
Justice Ekwo subsequently adjourned the matter until January 20, 2025, for a report on either the settlement or service.
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Dangote doesn’t need to sue them for issuing import licenses to marketers. He only needs to work on his prices. The marketers will include the cost of shipping into its selling price while Dangote wouldn’t need to do that. So, why challenging the import licenses? Focus more on how to source for crude nearby to remain highly competitive.
Dangote can legally challenge the illegal levies they are trying to introduce anyway.