Connect with us

Business

Legal battle intensifies as Dangote Refinery, FCCPC clash over N100bn import license lawsuit

Published

on

Dangote
Spread The News

 

 

The Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise (FZE) and the Federal Competition and Consumer Protection Commission (FCCPC) have taken opposing legal stances in a high-stakes lawsuit concerning a N100 billion import license dispute and allegations of monopolistic practices in Nigeria’s oil and gas sector.

The lawsuit, marked FHC/ABJ/CS/1324/2024, was initiated by Dangote Refinery to challenge the issuance of import licenses by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to select oil companies. These include the Nigerian National Petroleum Company Limited (NNPCL), Matrix Petroleum Services Limited, A.A. Rano Limited, and four others.

The refinery claims that the importation of petroleum products such as Automotive Gas Oil (AGO) and aviation turbine fuel is unnecessary, given that local production meets demand.

The case, filed in September 2024 and first mentioned at the Federal High Court, Abuja, in October, seeks N100 billion in damages from NMDPRA for allegedly issuing import licenses in violation of Sections 317(8) and (9) of the Petroleum Industry Act (PIA).

Dangote’s legal team, led by Dr. Ogwu James Onoja, SAN, and George Ibrahim, SAN, argues that import licenses should only be granted if there is a proven shortfall in domestic supply.

READ ALSO: Dangote Refinery reduces Nigeria’s dependence on European fuel imports – OPEC

In response, three of the implicated oil companies—Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited—have filed motions urging the court to dismiss the case. They argue that only NMDPRA and NNPCL have the legal authority to assess petroleum product shortages, not Dangote Refinery.

NNPCL’s counsel, Ademola Abimbola, SAN, further contends that the plaintiff erroneously sued the now-defunct “Nigeria National Petroleum Corporation” instead of the correctly registered “Nigerian National Petroleum Company Limited.” He also asserts that until NMDPRA enforces a Backward Integration Policy in the downstream sector, it is not obligated to limit import licenses based on domestic production capacity.

READ ALSO: Shehu Sani criticizes Dangote Refinery over fuel price hike, hits N1050

Amid the ongoing litigation, the FCCPC filed a motion on January 5, 2025, seeking to be joined as a co-defendant. The Commission argues that the case carries significant implications for competition in the oil and gas industry and could potentially lead to monopolistic practices favoring Dangote Refinery.

Advertisement

Led by Barrister Olarenwaju Osinaike, the FCCPC’s legal team asserts that restricting the ability of other oil companies to import petroleum products would stifle competition. The Commission highlights its mandate to eliminate anti-competitive practices, unfair business conduct, and market monopolization under the FCCPC Act.

“The extant spirit and provisions of the FCCPC Act do not permit monopolistic dominance in product manufacturing and distribution, including oil and gas,” the FCCPC stated in its filing. The Commission further warned that allowing Dangote Refinery to dictate import policies could create an anti-competitive market structure.

In its counter-affidavit, Dangote Refinery dismissed the FCCPC’s claims, arguing that its lawsuit aims to protect local refining rather than establish a monopoly. The refinery maintains that it has the capacity to meet Nigeria’s daily petroleum demand and that NMDPRA’s import licensing policy contradicts Section 317(8) and (9) of the Petroleum Industry Act.

Dangote’s counsel, George Ibrahim, also challenged the FCCPC’s legal standing in the matter, labeling the Commission a “meddlesome interloper.” He asserted that the PIA does not grant the FCCPC authority over petroleum licensing and advised that the Commission should seek legislative amendments if it wishes to alter the regulatory framework governing the sector.

This legal confrontation comes amid broader concerns regarding competition and regulatory oversight in Nigeria’s petroleum industry. Last year, Aliko Dangote signaled his willingness to sell his multibillion-dollar refinery to NNPCL, citing increasing regulatory challenges.

Meanwhile, the federal government recently permitted independent marketers to purchase petroleum products directly from Dangote Refinery, following NNPCL’s withdrawal as an intermediary.

The case, which is being presided over by Justice Inyang Ekwo, is set for its next hearing on February 5, 2025.

As the legal battle unfolds, industry stakeholders, regulators, and market participants are closely watching for potential ramifications on Nigeria’s oil and gas sector, competition policies, and domestic refining capacity.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Trending