The Dangote Petroleum Refinery and Petrochemicals FZE has initiated legal proceedings at a High Court in Abuja, seeking to invalidate recently issued import licenses for petroleum products into Nigeria. In the lawsuit, referenced as FHC/ABJ/CS/1324/2024, the company is also pursuing N100 billion in damages against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The suit alleges that the NMDPRA unlawfully granted import licenses to the Nigeria National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited, and other companies for importing key petroleum products, including Automotive Gas Oil (AGO) and Jet Fuel. Dangote argues that its production capacity is sufficient to meet the nation’s current daily petroleum product consumption.
Defendants Named in the Suit
Named as defendants in the lawsuit are the NMDPRA, NNPCL, A.Y.M. Shafa Holdings Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited. Represented by a legal team led by Ogwu Onoja (SAN), Dangote contends that the licenses issued to these entities violate the Petroleum Industry Act (PIA).
Concerns for Local Investments
In the suit, Dangote expresses concerns that its significant investments are at risk due to the NMDPRA’s actions. The company argues that the regulatory authority is failing to support local refineries by issuing import licenses rather than promoting domestic production.
Additionally, Dangote alleges a conspiracy involving international oil companies collaborating with the defendants to undermine the presence of a domestic refinery capable of alleviating Nigeria’s energy crisis and enhancing the economy.
Request for Court Intervention
Dangote seeks an injunction to prevent the NMDPRA from issuing or renewing import licenses for petroleum products. In a supporting affidavit, the company states that such licenses should only be granted during periods of product shortfall.
Impact of Import Licenses on Business
Ahmed Hashem, Dangote’s Group General Manager of Government and Strategic Relations, elaborated in the affidavit that the NMDPRA’s import licenses for AGO and Jet-A1 are negatively affecting Dangote’s operations. The company has invested billions of dollars, and the licenses pose a direct threat to its business.
Hashem also highlighted the NMDPRA’s plans to impose a 0.5% levy on wholesales, along with another 0.5% levy for the Midstream and Downstream Gas Infrastructure Fund (MDGIF). He contended that such levies contradict statutory provisions governing transactions within Free Zones, which aim to foster competition and attract foreign investment.
Reliefs Sought by Dangote
In addition to halting the issuance of import licenses, Dangote is pursuing several other reliefs from the court:
- A declaration that the NMDPRA’s actions violate Sections 317(8) and (9) of the Petroleum Industry Act by issuing import licenses unlawfully.
- A ruling affirming that as a Free-Zone Enterprise under the Nigerian Export Processing Zone Act, Dangote is exempt from all federal, state, and local taxes, levies, and rates.
- A declaration that the imposition of the 0.5% levies violates several legislative acts and the intent of the law.
- An order directing the NMDPRA to withdraw all import licenses granted to other companies.
- An injunction against the NMDPRA’s attempts to impose additional financial obligations on Dangote.
Court Proceedings and Future Developments
During a court session on Monday, the plaintiff’s attorney, George Ibrahim (SAN), indicated that there might be potential for an out-of-court settlement. He requested an adjournment to facilitate this process. Justice Inyang Ekwo subsequently adjourned proceedings until January 20, 2025, allowing the parties time to explore possible resolutions.
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