Importation of petroleum products crippling our business – Dangote Refinery

The Dangote Petroleum Refinery and Petrochemicals FZE says importation of petroleum products is crippling its business. The 650,000 barrels of fuel per day facility said this in a suit filed before the Federal High Court in Abuja, seeking to nullify import licences issued to the Nigeria National Petroleum Corporation Limited (NNPC) and five other companies […]

The Dangote Petroleum Refinery and Petrochemicals FZE says importation of petroleum products is crippling its business.

The 650,000 barrels of fuel per day facility said this in a suit filed before the Federal High Court in Abuja, seeking to nullify import licences issued to the Nigeria National Petroleum Corporation Limited (NNPC) and five other companies for the purpose of importing refined petroleum products.

The News Agency of Nigeria (NAN) reports that the other five companies are Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited and Matrix Petroleum Services Limited.
Dangote Refinery, in a suit marked: FHC/ABJ/CS/1324/2024 and filed by Ogwu Onoja, SAN, before Justice Inyang Ekwo, had sued Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and NNPCL as 1st and 2nd defendants.

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Also listed as 3rd to 7th defendants respectively in the originating summons dated Sept. 6 are Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
The company equally sought a N100 billion in damages against NMDPRA for allegedly continuing to issue import licences to NNPCL and the five companies for importing petroleum products.

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 prayed the court to declare that NMDPRA is allegedly in violation of Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing licences for the importation of petroleum products.

It argued that such licences should only be issued in circumstances where there is a petroleum product shortfall.

It also urged the court to declare that NMDPRA is in violation of its statutory responsibilities under the PIA for not encouraging local refineries.

In an affidavit deposed by Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, the officer averred that the import licences granted to other companies by NMDPRA for the importation of AGO and Jet-A1 are crippling the plaintiff’s business, to which it has committed substantial financial resources in billions of US dollars.

He said the plaintiff’s products are largely left un-patronised due to the alleged actions of NMDPRA.

He stated that NMDPRA had threatened to impose and demand 0.5% levy on the plaintiff on wholesales and off-takers, as well as another 0.5% levy on wholesales to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) via a letter dated June 10 contrary to statutory provisions that limit the implementation of levies on transactions within Free Zones.

He emphasised that the foundational purpose of establishing Free Zones is to foster competition, attract foreign investment and create tax havens.

Hashem further averred that there is an alleged grand conspiracy and concerted effort by International Oil Companies (IOC) and interests, in conjunction with the defendants, who are unhappy that Nigeria has an indigenous refinery ready to solve the lingering energy crisis and save 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 said the plaintiff is greatly distressed, and its investment’s risk being jeopardised unless the honourable court intervenes.

Dangote Refinery, therefore, sought an order of injunction restraining the 1st defendant from further issuing and/or renewing import licences to the 2nd to 7th defendants or other companies for the purpose of importing petroleum products.

It sought “general damages in the sum of N100,000,000,000 against the 1st defendant (NMDPRA).”

It also sought an order of court directing the NMDPRA to seal off all tank farms, storage facilities, warehouses and stations used by the defendants for the storage of all 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
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“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 called on Monday, George Ibrahim SAN, who appeared for Dangote Refinery, informed the court that the defendants had reached out to 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.

Ibrahim, therefore, sought an adjournment to allow the parties to explore our-of-court settlement.

He suggested the court should adjourn for either a possible report of settlement or a report of service.

Justice Ekwo consequently adjourned the matter until Jan. 20, 2025 for report of settlement or service.(NAN)