Dangote refinery, FCCPC differ as NNPCL insists on fuel import

In an attempt to prevent the Nigeria National Petroleum Company Limited and oil marketers from bringing refined petroleum products into the nation, Dangote Petroleum Refinery filed a lawsuit worth N100 billion. The Federal Competition and Consumer Protection Commission has pleaded with the Federal High Court in Abuja to permit it to join the case.

However, Dangote Refinery rejected the FCCPC's request to join the lawsuit, calling the commission an intrusive third party with no business in a matter involving the Petroleum Industry Act, a National Assembly Act.

The FCCPC stated that in order to challenge Dangote Refinery's lawsuit, it must be permitted to join the case as a defendant.

The commission contended that Dangote Refinery's goal of monopolising the petroleum sector went against the FCCPC's mandate to ensure a free market.

The commission’s lawyer, Olanrewaju Oshinaike, appeared before Justice Inyang Ekwo on Wednesday to push for its joinder in the suit.

In the motion he filed before the court, Oshinaike argued that the FCCPC needed to be joined in the suit because any judgment entered by the court would affect the commission’s mandate.

The lawyer noted that the main thrust of Dangote Refinery’s suit borders on “anti-competition and monopoly in the petroleum industry.”

The commission noted that Nigeria operates a free-market economy that allows individuals and entities to participate in various sectors without hindrance.

FCCPC also said its Act, which established the commission, obligates it to eliminate anti-competitive agreements and practices that may restrict other participants from engaging in the petroleum product distribution value chain.

Oshinaike stressed that one of the FCCPC’s functions is to eliminate anti-competitive agreements, and misleading, unfair, deceptive, or unconscionable marketing, trading, and business practices.

“There are grounds from the plaintiff’s case for believing that the plaintiff (Dangote Refinery) is attempting to create a monopoly situation in relation to the production and distribution of petroleum products in Nigeria through the machinery of the court.

The attorney stated that "monopoly behemoth activities in product manufacturing and distribution, including oil and gas, are not permitted by the extant spirit and provisions of the FCCPC Act."

The commission stated that it will pray for the complete dismissal of the lawsuit if permitted to join as a party.

However, the FCCPC's attempt to join the lawsuit was rejected by Dangote Refinery.

In a case involving PIA, the $20 billion Lekki-based facility characterised the commission as an intrusive outsider with no business there.

At the Wednesday proceedings, Justice Ekwo set a date of March 18 to rule on the NNPCL's preliminary objection, which called for the Dangote Refinery and Petrochemicals' N100 billion case to be dismissed.

In its lawsuit, FHC/ABJ/CS/1324/2024, Dangote Refinery is contesting the issuance of licence for the importation of refined petroleum products to the NNPC and oil marketers by the Nigeria Midstream and Downstream Petroleum Regulatory Authority.

Apart from the NNPCL and the NMDPRA, others listed as defendants in the suit are AYM Shafa Limited; A.A. Rano Limited; T. Time Petroleum Limited; 2015 Petroleum Limited; and Matrix Petroleum Services Limited.

Dangote Refinery, through its counsel, Ogwu Onoja (SAN), is praying the court to nullify import licences issued by NMDPRA to NNPCL and the five other companies for importing refined petroleum products.

The plaintiff also sought a declaration that NMDPRA violated Sections 317(8) and (9) of the Petroleum Industry Act by issuing licences to import petroleum products, arguing that such licences should only be issued in cases of a petroleum product shortfall.

The company further sought N100bn in damages against NMDPRA for allegedly continuing to issue import licences to NNPCL and the other companies, among other reliefs.

In response to the suit, AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited filed counter-affidavits, urging the court to dismiss the suit.

They argued that Dangote Refinery was not entitled to the reliefs sought and that its current production did not meet the national daily petroleum product sufficiency required.

They argued that granting the request of the refinery would amount to monopolisation, stating that the NMDPRA was mandated to promote competition and prevent abuse of dominant market positions or monopolies in the oil sector.

They also argued that monopolising the sector would harm the economy, maintaining that the import licences issued to them were lawful and in compliance with the PIA, the Federal Competition and Consumer Protection Act, and other relevant laws.
In the meantime, the NNPCL asked the court to reject Dngote Refinery's lawsuit in its preliminary objection since the corporation being sued did not exist.

"We are seeking an order of this court striking out this suit for lack of jurisdiction or in another alternative strike out the second defendant suit," stated Abimbola Ademola (SAN), the attorney for NNPCL, at the preliminary objection hearing on Wednesday.

The legal team for Dangote Refinery, however, contested the preliminary objection and requested that the court reject it.

Justice Inyang Ekwo heard both sides and postponed making a decision until March 18, 2025.