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

Dangote Petroleum Refinery and Petrochemicals has taken legal action against the Nigeria Midstream and Downstream Petroleum Regulatory Authority and some major importers in the oil and gas sector at the Federal High Court in Abuja.

In suit number FHC/ABJ/CS/1324/2024, Dangote Refinery sought N100bn in damages from NMDPRA for continuing to issue licences for the importation of refined products such as Automotive Gas Oil and Jet-A1 (aviation fuel).

Dangote claimed the refinery’s production exceeded domestic consumption levels, rendering imports unnecessary.

But oil marketers kicked against this, stressing that the market had been deregulated and dealers were free to import the commodities or buy from the $20bn Lekki-based refinery.

Dangote also sought the cancellation of import licences granted to the Nigerian National Petroleum Corporation Limited, Matrix Petroleum Services Limited, A. A. Rano Limited, and four other firms.

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

The refinery alleged that these imports sabotaged its operations by flooding the market with refined products it already produced without shortfalls.

The plaintiff (Dangote) contended that NMDPRA violated sections of the Petroleum Industry Act by issuing import licences despite no evidence of product shortfalls. Dangote accused the regulator of neglecting its statutory role to promote local refineries.

According to an affidavit by Ahmed Hashem, Dangote refinery’s General Manager, Government and Strategic Relations, the importation of AGO and Jet-A1 has disrupted the refinery’s business operations, with its products left largely unsold.

In the affidavit, it was noted that the “plaintiff is distressed greatly, and its business activities and investments are being jeopardised and may get worse by the day unless the Honourable Court intervenes.”

Dangote refinery further claimed that NMDPRA threatened to impose a 0.5 per cent levy on wholesale buyers and off-takers, alongside another 0.5 per cent levy for the Midstream and Downstream Gas Infrastructure Fund, contrary to regulations governing free zones.

The refinery argued that such levies contradicted the purpose of free zones, which were intended to foster competition and attract foreign investments.

The suit also accused international oil companies and the defendants of conspiring to undermine Nigeria’s indigenous refining efforts.

It noted that “these companies and entities are doing everything to sabotage the operation of the plaintiff and have been sponsoring the media to come up with all sorts of stories and untrue statements.”

The refinery further sought a court declaration confirming that it was exempt from all federal, state, and local taxes, in accordance with the Nigerian Export Processing Zone Act, the Companies Income Tax Act, and other relevant laws.

A part of the document obtained by The PUNCH showed Dangote refinery sought the following reliefs from the court against the defendants, “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.

“A declaration that the 1st Defendant is in violation of its statutory role and responsibility under the PIA towards encouraging 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, 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 Plaintiff being an entity duly registered as a Free-Zone Enterprise is exempted from all federal, state, and local government taxes, levies, and other rates.”

Dangote refinery requested the court to stop NMDPRA from issuing further import licences to the named companies, seal off their tank farms, storage facilities and stations, and withdraw all existing import licences granted to them.

Some of the orders sought from the court include “An order voiding or setting aside import licences issued to the 2nd – 7th defendants for the purpose of importing refined petroleum products already being produced by the plaintiff without shortfalls.

“An order of court directing the 1st defendant to seal off all tank farms, storage facilities, warehouses and stations being used by the 2nd – 7th defendants for the purpose of storage of all refined petroleum products being imported into Nigeria.”