Fuel import: Marketers differ as Dangote sues NNPCL, six others

Dangote Petroleum Refinery and Petrochemicals has filed a lawsuit in the Federal High Court in Abuja against the Nigeria Midstream and Downstream Petroleum Regulatory Authority as well as a few significant oil and gas importers.

Dangote Refinery sued NMDPRA in suit number FHC/ABJ/CS/1324/2024, claiming N100 billion in damages for granting licenses to import refined goods such automotive gas oil and jet-A1 (aviation fuel).

Dangote asserted that imports were unneeded because the refinery's output exceeded levels of domestic consumption.

Oil marketers, however, reacted to this by emphasising that the market was deregulated and that dealers could import the commodities or purchase from the $20 billion refinery located in Lekki.

Additionally, Dangote requested that the import licenses given to A. A. Rano Limited, Matrix Petroleum Services Limited, Nigerian National Petroleum Corporation Limited, and four other companies be revoked.

NMDPRA, NNPCL, AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited were also added as defendants in the lawsuit.

By flooding the market with refined products it already produced without shortages, the refinery claimed that these imports undermined its operations.

Dangote, the complainant, argued that by granting import licenses in the absence of any proof of product shortages, NMDPRA had broken provisions of the Petroleum Industry Act. Dangote charged that the regulator was not fulfilling its mandate to support regional refineries.

Ahmed Hashem, the general manager of the Dangote refinery, testified that the government and Strategic Relations, the importation of AGO and Jet-A1 has disrupted the refinery’s business operations, with its products left largely unsold.
The "plaintiff is considerably distressed, and its business activities and investments are being jeopardised and may get worse by the day unless the Honourable Court intervenes," according to the affidavit.

The Dangote refinery further asserted that, in violation of free zone regulations, NMDPRA threatened to impose a 0.5% fee on wholesale buyers and off-takers in addition to a 0.5% levy for the Midstream and Downstream Gas Infrastructure Fund.

The refinery contended that these taxes went against the goals of free zones, which were to promote competition and draw in foreign capital.

International oil corporations and the defendants were also charged in the lawsuit with plotting to thwart Nigeria's domestic refining initiatives.

It stated that "these businesses and organisations are making every effort to undermine the operation of the plaintiff and have been sponsoring the media to come up with all sorts of stories and untrue statements.”
In addition, the refinery requested a court order stating that it was exempt from all federal, state, and local taxes in line with the Companies Income Tax Act, the Nigerian Export Processing Zone Act, and other pertinent legislation.

"A Declaration that the 1st Defendant is in violation of Sections 317(8) and (9) of the Petroleum Industry Act by issuing licences for the importation of petroleum products, as such licences are to be issued only in circumstances where there is a petroleum product shortfall," according to a portion of the document obtained by The PUNCH, revealed that Dangote refinery requested the following reliefs from the court against the defendants.

"A finding that the first defendant is not fulfilling its statutory obligation under the PIA to promote local refineries such as the Plaintiff when it issued licences to other companies to import petroleum products into Nigeria where there is no shortfall in local production.
"A Declaration that the Plaintiff, as an entity duly registered as a Free-Zone Enterprise, is exempt from all federal, state, and local government taxes, levies, and other rates under Section 8(1) of the Nigerian Export Processing Zone Act (NEPZA), Sections 23(h) and 55(1) of the Companies Income Tax Act (CIT Act), paragraph 6 of the Second Schedule to the CIT ACT, Regulations 54(2)(a)(i) of the Dangote Industries Free Zone Regulation, 2020, and the Finance Act."

The Dangote refinery asked the court to revoke all of the companies' current import licenses, close off their tank farms, storage facilities, and stations, and prevent NMDPRA from granting any more import licenses to the listed businesses.

"An order voiding or setting aside import licenses issued to the second through seventh defendants for the purpose of importing refined petroleum products already being produced by the plaintiff without shortfalls" is one of the orders the court is requesting.

"A court order directing the first defendant to prevent the second through seventh defendants from using any tank farms, storage facilities, warehouses, or stations to store any refined petroleum products being imported into Nigeria."

Dangote's attorney, George Ibrahim SAN, told Justice Inyang Ekwo during a hearing on Monday that the parties were considering a potential settlement.

He asked for an adjournment to facilitate additional talks, and the judge set a deadline of January 20, 2025, for a report on the settlement or service of the summons.
NMDPRA is unaware

George Ene-Ita, the NMDPRA spokesperson, stated when contacted that the organisation was unaware of the lawsuit and had not been summoned regarding it.

“Well, the authority hasn’t been served any summons on this matter,” George replied in a phone conversation.

Additionally, when our journalist asked the national oil business for its response on the matter, NNPCL spokesperson Femi Soneye replied with a WhatsApp sticker that said, "Eziokwu."

But according to Billy Gillis-Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria, the Petroleum Industry Act allowed the NMDPRA to grant gasoline import licenses to eligible businesses.

"It becomes subjudice to even analyse the case because the matter is already in court," he stated. However, on a general note, we have a Petroleum Industry Act of 2021 and NMDPRA is mandated by law to issue import licenses to qualified companies.
In the worst situation, the Central Bank of Nigeria will claim that they are out of foreign exchange. In this circumstance, the corporation is permitted to import goods into Nigeria as long as they have a method for calculating trading values.

"It is easier for Nigerians to have access to products at reasonable prices the more products we have from various sources."

According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, he was unaware that Dangote had filed a lawsuit against any marketer for importing petroleum.

However, he claimed that after the subsidies were eliminated, the market was now open.

"I don't know if Dangote brought legal action against certain marketers for bringing in petroleum items. This marketer is liberalised. Now the market is open. Marketers who might source can do so if their landing cost is cheaper. Now that the government is no more paying subsidies, we should allow for free trade – willing buyer, willing seller relationship.
"Those statements made by others are rumours. No one has been sued by Dangote. According to Ukadike, Dangote is still upholding his agreement with NNPC and is not prepared to sell to anybody else until it is broken.