Aliko Dangote’s Dangote Petroleum Refinery and Petrochemicals FZE faced a setback on Monday, January 20, 2025, as it failed to withdraw a lawsuit challenging the import licenses issued to the Nigerian National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited, A.A. Rano Limited, and four other companies. The refinery claims these licenses violate regulations since it produces refined petroleum products domestically without shortfalls.
The Federal High Court in Abuja, presided over by Justice Inyang Ekwo, adjourned the case to January 30, 2025, after the plaintiff failed to serve its amended suit on the defendants.
Key Issues in the Case
In suit number FHC/ABJ/CS/1324/2024, Dangote Refinery seeks N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The suit alleges that NMDPRA unlawfully issued licenses for the importation of petroleum products such as Automotive Gas Oil (AGO) and Jet Fuel (Jet-A1) to NNPCL, Matrix, and others, despite local production exceeding demand.
The defendants include:
1.Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA)
2.Nigerian National Petroleum Corporation Limited (NNPCL)
3.Matrix Petroleum Services Limited
4.A.A. Rano Limited
5.AYM Shafa Limited
6.T. Time Petroleum Limited
7.2015 Petroleum Limited
The plaintiff argues that the NMDPRA violated Sections 317(8) and (9) of the Petroleum Industry Act (PIA), which stipulates that import licenses can only be granted when there is a proven shortfall in local supply.
The Build-Up to the Current Legal Battle
This legal tussle began in June 2024, culminating in the lawsuit filed on September 6, 2024. By October 2024, during initial court proceedings, Dangote Refinery’s counsel, George Ibrahim (SAN), informed the court that settlement discussions were ongoing. However, despite an announcement from Dangote Group in October 2024 that the matter would be resolved and the case withdrawn by January 2025, no progress has been made in court.
Developments Before January 2025 Hearing
In response to the lawsuit:
•Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited filed applications requesting the court to dismiss the case.
•Their counsel, Ahmed Raji (SAN), argued that determining petroleum product shortfalls falls exclusively under the purview of NMDPRA and NNPCL, as stipulated by Section 317(9) of the PIA.
•NNPCL’s counsel, Kehinde Ogunwumiju (SAN), also filed a preliminary objection, pointing out an error in the suit, as Dangote Refinery had sued “Nigeria National Petroleum Corporation,” a non-existent entity, instead of the properly registered “Nigerian National Petroleum Company Limited.”
To address this issue, Dangote Refinery sought leave to amend the suit, but as of January 20, 2025, the amended application had not been served on the defendants.
Court Proceedings on January 20, 2025
At the resumed hearing:
•The plaintiff’s counsel, George Ibrahim (SAN), admitted to delays in serving the amended application due to errors in the original filing.
•Counsel for NMDPRA, Ahmed Raji (SAN), and others noted they had not received the amended suit.
•Justice Inyang Ekwo criticized the plaintiff for failing to prepare the case for hearing, leading to yet another adjournment to January 30, 2025, for further exchanges of legal documents.
The Bigger Picture: Dangote Refinery’s Position
Dangote Refinery’s lawsuit reflects its broader frustrations with Nigeria’s petroleum import system. The refinery, a multibillion-dollar project and Africa’s largest, claims it can meet the country’s petroleum needs without imports.
However, its position has faced challenges, including:
•Disputes with regulators and equity partners.
•Accusations of substandard products by other importers.
•Legal questions over the authority of NMDPRA and NNPCL to issue import licenses.
What You Should Know
1.Potential Sale of Dangote Refinery: Aliko Dangote recently hinted at selling the refinery to NNPCL amid growing disputes.
2.Policy Shift: The federal government has directed oil marketers to purchase products directly from Dangote Refinery, bypassing NNPCL as a middleman.
3.Regulatory Challenges: NNPCL and NMDPRA remain the statutory bodies authorized to assess petroleum shortfalls, a central issue in the lawsuit.
This ongoing case highlights the complexities of Nigeria’s oil and gas sector, even as Dangote Refinery positions itself as a key player in reshaping the country’s petroleum landscape. With the January 30 hearing on the horizon, the resolution of this dispute could have significant implications for the refinery and Nigeria’s energy industry.
