Three oil marketers—AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—have asked the Federal High Court in Abuja to dismiss a lawsuit filed by Dangote Petroleum Refinery and Petrochemicals.
In a joint counter affidavit marked FHC/ABJ/CS/1324/2024 and dated November 5, 2024, the marketers responded to Dangote Refinery’s originating summons. They argued that approving the refinery’s request could have dire consequences for Nigeria’s oil sector.
The marketers warned that granting Dangote’s bid for a monopoly over the industry would be disastrous for the country.
In its originating summons, filed on September 6, 2024, Dangote Refinery sued the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Corporation (NNPC) along with other defendants, including the three marketers. The refinery sought a court declaration that NMDPRA violated the Petroleum Industry Act (PIA) by issuing licenses for the importation of petroleum products, arguing that such licenses should only be issued in the event of a product shortfall.
Additionally, Dangote sought a ruling that NMDPRA had failed in its statutory duty under the PIA by not promoting local refineries, like Dangote’s.
In response, the marketers contended that Dangote Refinery does not currently produce enough petroleum products to meet Nigeria’s daily consumption needs. They argued that the refinery had not provided any evidence to the contrary.
The marketers emphasized their eligibility to import petroleum products under Section 317(9) of the PIA, having met all legal requirements for the issuance of import licenses. They further argued that these licenses, issued by NMDPRA, did not harm Dangote Refinery’s business or operations.
“The licenses issued to the defendants were fully in compliance with the Petroleum Industry Act, the Federal Competition and Consumer Protection Act, and other relevant laws,” they said.
The marketers stressed that granting Dangote Refinery monopoly power over Nigeria’s oil industry, as requested in its suit, would eliminate competition, drive up prices, and destabilize the economy. They warned that such a move would cause severe hardship for Nigerians and worsen the nation’s already fragile economy.
They also pointed out the risks of depending entirely on one refinery for fuel supply. Should Dangote’s refinery experience operational problems, the country could face an energy crisis, lacking sufficient reserves to cover the shortfall.
“Without reserves that would last for at least 30 days, Nigeria would be thrown into a deep energy crisis in the event of a breakdown at the refinery,” the marketers argued. “This is a clear recipe for disaster in the country’s energy sector.”
The marketers urged the court not to grant Dangote’s request, asserting that doing so would leave Nigeria at the mercy of Dangote Refinery in terms of fuel availability and pricing.
The court, presided over by Justice Inyang Ekwo, has scheduled a hearing for January 20, 2025, for a settlement report or service.
**Dangote Refinery’s Export Progress**
In a related development, a recent report revealed that three foreign companies—Vitol Group, Trafigura Group, and BP Plc—have become the dominant buyers of products from Dangote Refinery, accounting for about 75% of its total exports. The refinery, which started production earlier this year, has been reshaping the petroleum trade landscape in Africa and Europe.
According to data from Precise Intelligence, the three firms have accounted for most of the shipments from Dangote’s refinery since production ramped up in mid-2024. The refinery has been exporting diesel, aviation fuel, and LPG, and is now also producing Premium Motor Spirit (petrol).
Once fully operational, Dangote Refinery is expected to process 650,000 barrels of crude daily, surpassing the capacity of any single refinery in Europe or Africa. This will significantly impact regional oil and fuel trading.
The refinery has already exported nearly 6 million tons of fuel since starting operations, roughly equivalent to 45 million barrels, with shipment rates averaging around 35,000 tonnes per day in October. The refinery has also started selling to the Nigerian market, contributing to the country’s domestic supply.
The fuel cargoes exported from Dangote’s refinery are closely monitored, as they offer insight into the refinery’s operational status. The largest volumes of exports are diesel, followed by fuel oil, with gasoline and jet fuel also significant components of the refinery’s output.
Peoplesmind
