Three oil companies — Matrix Petroleum Services Limited, AA Rano Limited and AYM Shafa Limited — have asked the Federal High Court in Abuja to restrain the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) from reviewing or withdrawing their licenses to import.

They also asked the court not to block their importation of petrol in the interest of energy security and promoting healthy competition in Nigeria’s oil and gas sector.

This is stated in their court filings in response to the suit filed by Dangote Petroleum Refinery and Petrochemicals FZE, which seeks to cancel the import licenses issued to the Nigerian National Petroleum Corporation Limited (NNPCL) and five other companies to import refined petroleum products that Dangote already produces domestically, without shortages.

In their written address and counter-affidavit, dated November 5, 2024 and filed by Ahmed Raji SAN, it was contended that the defendants’ business does not in any way impede, disrupt or prejudice the operations of the Dangote Refinery.

The three defendants allege that the plaintiff would seek to monopolize the oil industry in Nigeria, where it alone would control supply, distribution and pricing.

Raji emphasized that countries around the world are ensuring energy security, noting that even nations like the United States – where oil reserves and refining capacity are far greater than Nigeria’s – still import and stockpile petroleum products to protect against unforeseen circumstances and to ensure a constant supply, thus ensuring energy. security.

Dangote Refinery Claims in Court and Defendants’ Fresh Counterclaims

In suit number FHC/ABJ/CS/1324/2024, Nairametrics exclusively reported that Dangote Refinery seeks N100 billion in damages against NMDPRA for continuing to issue import licenses to NNPCL, Matrix and other companies for the importation of petroleum products such as automotive diesel fuel (AGO) and jet fuel (turbine fuel aviation), “despite the fact that Dangote Refinery produces AGO and Jet-A1 in quantities that exceed the current daily consumption of petroleum products in Nigeria.”

The defendants in the case include NMDPRA, NNPCL, AYM Shafa Limited, AA Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited and Matrix Petroleum Services Limited (1st to 7th defendants).

• In the original summons, dated September 6, 2024 and seen exclusively by Nairametrics, the plaintiff’s lawyer, Ogwu James Onoja SAN, asked the court to declare that the NMDPRA is alleged to contravene Sections 317(8) and (9) of the Petroleum Act. Industry Act (PIA) by issuing import licenses for petroleum products. He argued that such licenses should be granted only in cases of shortage of petroleum products.

• He also asked the court to declare that the NMDPRA breached its statutory responsibilities under the PIA by not encouraging local refineries like the Dangote Refinery.

• At the first hearing in October before Justice Inyang Ekwo, George Ibrahim SAN, counsel for the applicant, informed the judge that discussions were ongoing between the parties to settle the matter.

• He asked for an adjournment to give the parties time to reach a settlement, suggesting the court adjourn for a report on the deal or the status of the notice.

The judge granted the adjournment.

In the affidavit of the defendants, filed by Ali Ibrahim Abiodun, Acting General Manager of AYM Shafa (with the consent and authority of Matrix, AA Rano and AYM), it was stated that the defendants are qualified and can be authorized as importers of refined petroleum products in under section 317(9) of the PIA and that their licenses to import such products have been lawfully issued by the competent authority; NMDPRA.

• The affidavit also stated that since Dangote Refinery started refining petroleum products, AYM Shafa has been a major buyer from the plaintiff having purchased about 116,000,000 liters of AGO and hundreds of metric tonnes of Premium Motor Spirit (PMS), despite Dangote’s alleged inability to cope. full application.

• The deponent claimed that it usually takes an average of two months for Dangote Refinery to honor orders and that it rarely meets demand, with trucks waiting for months to be loaded at the refinery.

• Instead, he claimed it takes about three weeks to import petroleum products from offshore refineries.

• The affidavit revealed that the AA Rano oil depot in Lagos has a storage capacity of 55,000,000 liters and can load about 200 trucks per 24 hours.

• The deponent stated that the company also owns 220 gas stations and another 85 affiliates and leased gas stations.

According to the deponent, AA Rano was one of the first to take over AGO from the Dangote Refinery, loading 20,000 tonnes of AGO on or about April 16, 2024, and has since acquired and loaded additional cargoes totaling about 190,000 .000 liters.

Despite this patronage, the affidavit alleged that Dangote Refinery continued to put up obstacles making it difficult for AA Rano to procure products exclusively from the refinery.

“Petroleum, in both its crude and refined forms, is an international commodity that is traded globally, and there are universally accepted business practices and platforms that ensure the fairness and sanctity of contracts in the industry.” the depositor stated.

He also claimed that the plaintiff had abandoned fair trade practices, instead introducing a policy whereby buyers must deposit 110% of the value of their orders in letters of credit (LC), with the actual price of the product only revealed five days after the Date LC ie after the product has been loaded from Dangote Refinery.

He stated that this practice leaves buyers unsure of the final cost until after delivery, often forcing them to sell at a loss and places marketers, consumers and Nigeria at the mercy of the plaintiff.

“The landing costs of the imported products, including freight, insurance and customs duties, are cheaper than the wholesale price offered by the plaintiff for its products, which are not subject to customs duties and are less expensive to transport to our warehouses.” the affidavit stated.

The senior counsel emphasized that his clients had never obtained any advantage that would disadvantage or prejudice the applicant.

He asked the court to dismiss the suit.

Nairametrics reports that the case is set for hearing on January 20, 2025, for a status report.

What you should know

When Dangote’s trial became public, the The Dangote Group later issued a statement describing the lawsuit against NNPC Limited and other oil companies as “an old issue”.

• In a statement dated October 21, 2024, the Group Communications Officer, Anthony Chiejina, clarified that Dangote Refinery intends to withdraw the process by January 2025.

“This is an old matter that started in June and culminated in a matter that was filed on September 6, 2024,” the statement said.

“The parties are currently in talks following President Bola Tinubu’s directive on Naira sales of crude oil and refined products which was approved by the Federal Executive Council (FEC). We made significant progress, and events have overtaken this development since then.”

“Neither party has received court proceedings and there is no intention to do so. We agreed to end the proceedings. It is important to emphasize that no orders have been placed and there is no adverse effect on any party. We expect to formally withdraw the matter to court in January 2025.”

Recall that Africa’s richest man, Aliko Dangote, has announced his willingness to sell his multi-billion dollar oil refinery to the state-owned energy company, NNPC Limited.

This decision came amid escalating disputes with regulators and equity partners, prompting reflection on its investment options in Nigeria.

Dangote has also been seen advocating the importation of substandard petroleum products into Nigeria by others.

Nairametrics earlier reported that the Federal Government later granted marketers the license to buy petroleum products directly from the Dangote Refinery following the decision of the NNPC to drop its role as an intermediary between the two parties.

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