Legal Action Seeks to Nullify Licenses and Claim Damages Amidst Domestic Production Claims
The Dangote Petroleum Refinery and Petrochemicals FZE has taken legal action against the Nigeria National Petroleum Corporation Limited (NNPC) and six other companies, seeking to nullify import licenses granted for the importation of refined petroleum products into Nigeria. The suit, filed at the Federal High Court in Abuja, is registered as FHC/ABJ/CS/1324/2024.
Grounds for the Lawsuit
The plaintiff contends that the import licenses issued to the defendants are inappropriate given that there is currently no shortfall in domestic production of refined petroleum products. The other defendants in the case include the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
Dangote Refinery is requesting the court to award N100 billion in damages against the NMDPRA for allegedly continuing to issue import licenses for products such as Automotive Gas Oil (AGO) and Jet Fuel, despite the Dangote Refinery’s capability to meet current demands.
Specific Legal Requests
The plaintiff is seeking several legal remedies, including:
- An injunction restraining NMDPRA from issuing or renewing import licenses to the other defendants.
- An order directing NMDPRA to seal all facilities used by the defendants for storing imported petroleum products.
- A declaration that Dangote Refinery, as a registered Free-Zone Enterprise, is exempt from federal, state, and local taxes and levies.
- An injunction preventing NMDPRA from imposing a 0.5% levy on off-takers and an additional 0.5% wholesale levy in favor of the Midstream Downstream Gas Infrastructure Fund (MDGIF).
Allegations of Statutory Violations
According to the plaintiff, NMDPRA’s issuance of import licenses is in breach of Sections 317(8) and (9) of the Petroleum Industry Act. The plaintiff argues that such licenses should only be granted when there is a verified shortfall in petroleum products in the country, a situation they claim does not currently exist.
In an affidavit submitted to the court, Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, stated that the licenses granted to other companies are undermining their business, which has invested billions of dollars in infrastructure.
Potential for Out-of-Court Settlement
During the court proceedings, Mr. George Ibrahim, SAN, a member of the plaintiff’s legal team, indicated that discussions for an amicable resolution were underway, as the defendants expressed interest in exploring an out-of-court settlement.
Justice Inyang Ekwo subsequently adjourned the matter until January 20, 2025, for a report on the settlement discussions.
Conclusion
The legal action taken by Dangote Refinery against NNPC and other defendants underscores the ongoing challenges within Nigeria’s petroleum sector and the complexities surrounding import licenses amid local production capabilities. The outcome of this case will be closely watched by industry stakeholders and could have significant implications for the future of Nigeria’s oil and gas industry.
