Dangote Refinery and the FCCPC are engaged in a legal dispute regarding accusations of a petrol monopoly in Nigeria.
Dangote Petroleum Refinery and Petrochemicals FZE and the Federal Competition and Consumer Protection Commission (FCCPC) are currently engaged in a legal dispute concerning a lawsuit filed by the refinery, which seeks N100 billion in damages. This lawsuit includes allegations of monopolistic practices within the oil and gas industry.
This information is derived from counter-affidavits and related court documents that have been exclusively reviewed by Nairametrics in connection with the refinery's case.
The ongoing case, identified as FHC/ABJ/CS/1324/2024, aims to annul import licenses granted to several Nigerian oil companies by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The companies involved include the Nigerian National Petroleum Company Limited (NNPCL), Matrix Petroleum Services Limited, A.A. Rano Limited, among others.
In the lawsuit, filed in September 2024 and first presented at the Federal High Court in Abuja in October of the previous year, Dangote Refinery is claiming N100 billion in damages from NMDPRA. The refinery contends that NMDPRA has improperly continued to issue import licenses to NNPCL, Matrix, and other firms for the importation of petroleum products, such as Automotive Gas Oil (AGO) and Jet Fuel, despite the fact that these products are already being produced domestically without any supply shortages.
The legal representatives for the refinery, Dr. Ogwu James Onoja, SAN, and George Ibrahim, SAN, assert that NMDPRA has allegedly breached Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing these import licenses, which should only be authorized in cases of verified supply shortfalls.
Days after the lawsuit was filed and subsequently adjourned, three oil companies—Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited—submitted a motion requesting the court to dismiss the case.
They contended that only the NMDPRA and NNPCL possess the legal authority to assess petroleum product shortages in Nigeria, excluding Dangote Refinery from this determination.
In addition, NNPCL’s attorney, Ademola Abimbola, SAN, lodged a preliminary objection, asserting that the plaintiff mistakenly sued the “Nigeria National Petroleum Corporation,” which does not exist, rather than the properly registered “Nigerian National Petroleum Company Limited.”
Abimbola further claimed that until the NMDPRA opts to implement the Backward Integration Policy in the downstream petroleum sector, it is not required to limit the issuance of petroleum product import licenses solely to address deficiencies in local refinery output.
In a counter-affidavit and written submission filed last Friday and reviewed by Nairametrics, George Ibrahim urged the court to reject NNPCL’s objection, arguing that a thorough review of the originating summons, affidavit, and accompanying documents clearly indicates that the plaintiff’s concerns revolve around the “blatant violation of the Petroleum Industry Act (PIA) by a statutory body established to enforce the Act.”
According to Nairametrics, the case is currently before Justice Inyang Ekwo, with the next hearing scheduled for February 5, 2025.
While the case remains unresolved, the FCCPC filed a motion on notice on January 5, 2025, seeking the court’s permission to join as a “co-defendant” in the lawsuit against the refinery.
The FCCPC legal team, headed by Barrister Olarenwaju Osinaike, has filed a motion that our reporters got a sneak peek at. They’re looking to join the current proceedings because they believe the outcome could impact their interests.
The Commission pointed out that the case revolves around whether stopping the oil companies involved from using their licenses could create anti-competitive conditions or give Dangote Refinery an unfair advantage. Osinaike highlighted that a key issue in the refinery’s initial summons is about competition and monopoly in the oil sector. He also reminded the court of the FCCPC's role, which includes tackling anti-competitive agreements and addressing misleading or unfair 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 FCCPC stated.
The FCCPC argued that Nigeria has a free-market economy where people and businesses can jump into different sectors without any obstacles.
He pointed out that the FCCPC Act, which set up the Commission, requires it to get rid of any anti-competitive agreements and practices that could prevent others from taking part in the distribution of petroleum products.
“The extant spirit and provisions of the FCCPC Act do not permit monopoly behemoth activities in product manufacturing and distribution, including oil and gas,” the FCCPC stated.
The attorney emphasized that should the court ultimately allow the Commission to participate in the lawsuit, it would pursue a complete dismissal of the case.
In response to the FCCPC's request to join the litigation, which was reviewed by Nairametrics, Dangote Refinery asserted that:
“It is not true that the plaintiff’s suit is monopolistic but solely aimed at revamping local refining of petroleum products in Nigeria.”
Ibrahim argued that his client received a license from NMDPRA under the Petroleum Industry Act to import, produce, and refine petroleum products.
He insisted that NMDPRA should issue import licenses strictly in accordance with Section 317(8) and (9) of the Petroleum Act, which allows for the importation of refined products only in cases of local production shortages.
“Dangote Refinery is able to meet the daily consumption demand of the country,” he stated, adding that NMDPRA allegedly granted licenses to the defendants to import petroleum products contrary to Section 317(8) and (9) of the Petroleum Industry Act.
“The Petroleum Industry Act does not give the Federal Competition and Consumer Protection Commission (FCCPC) authority to issue licenses or impose levies on the plaintiff,” he continued, describing the FCCPC as a “meddlesome interloper” that should not be allowed to join the suit.
He further argued that the FCCPC has no role in a matter concerning the PIA—an Act enacted by the National Assembly.
He suggested that if the FCCPC has concerns regarding the petroleum sector, it should pursue an amendment to the legislation.
It has been reported that the court is expected to rule on the FCCPC's application during the ongoing proceedings.
Africa's wealthiest individual, Aliko Dangote, revealed last year that he was open to selling his multibillion-dollar refinery to NNPCL due to ongoing conflicts with regulators and equity partners.
Dangote had earlier claimed that other importers were flooding Nigeria with low-quality petroleum products. According to Nairametrics, the federal government eventually permitted marketers to buy petroleum products straight from Dangote Refinery after NNPCL chose to step back as a middleman between the refinery and the marketers.