The oil industry in Nigeria is in jeopardy due to Dangote Petroleum Refinery’s intended energy monopoly, according to three prominent oil marketers who testified before the Federal High Court in Abuja.
The oil marketers claim that Dangote’s effort to corner the market on the country’s oil supply will lead to catastrophe.
Dangote Petroleum sued three marketers (AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited) in a case marked FHC/CS/ABJ/1324/2024. In their responses, the marketers argued that the plaintiff does not produce enough petroleum products to meet the daily needs of Nigerians and that no evidence to the contrary was presented to the court.
Dangote filed a lawsuit against a number of companies in September 2024, including NNPCL, AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited. The lawsuit was filed with the Nigeria Midstream And Downstream Petroleum Regulatory Authority (NMDPRA).
By giving licenses for the importation of petroleum products, NMDPRA is in contravention of sections 317(8) and (9) of the Petroleum Industry Act, PIA, according to Dangote’s September 6, 2024, suit.
The only time such licenses should be granted, according to Dangote, is when there is a shortage of petroleum products.
Additionally, he requested that the court rule that the NMDPRA is in breach of its statutory obligations under the PIA since it is not supporting domestic refineries like Dangote Refinery.
In their counter affidavit dated November 5, 2024, the marketers asserted their qualifications and entitlement to be issued an import license by the 1st defendant to import petroleum products in Nigeria, as defined in Section 317(9) of the Petroleum Industry Act. One Ali Ibrahim Abiodun deposed to this fact.
They claimed that the current lawsuit would lead to the elimination of competitive pricing for petroleum products in Nigeria, the worsening of the country’s already struggling economy, “untold hardship on Nigerians,” and ultimately lead to a political catastrophe if Dangote is granted monopoly power in the petroleum industry.
They informed the court that Nigeria will not achieve energy security if it stops importing petroleum products and instead lets Dangote be the only producer and supplier in the country, free to set its own prices. This, they said, will lead to rising petroleum product prices.
They claimed that Nigeria would never achieve energy security if it stopped importing petroleum products and instead allowed the Plaintiff to be the country’s only supplier of the fuel, with the freedom to set its own prices. This would lead to ever-increasing prices for the fuel in Nigeria.
If the plaintiff’s production chain experiences a breakdown or obstruction that prevents it from producing, Nigeria will face an energy crisis.
The country does not have enough reserves to cover the costs of ordering, paying for, freighting, and importing refined products into its tanks for at least 30 days.
“Giving the plaintiff (Dangote) judicial imprimatur to be the sole supplier of refined petroleum products to Nigerians, thereby encouraging monopoly in a major aspect of Nigeria’s oil industry, is a recipe for disaster in Nigeria’s energy sector, given the complete lack of credible and demonstrable proof that the plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians.”
Plus, they informed the court that Dangote’s requested reliefs would make him a monopolist in Nigeria’s petroleum sector, and that if granted, it would put the country and its citizens at the whim of the company in terms of the price and availability of petroleum products.
In addition, they stated in their response that the import licenses given to them by the first defendant were properly provided to them because they had previously fulfilled all the necessary legal conditions.
The plaintiff’s business and refinery were not in the least bit hampered by the import licenses that were legitimately granted to the defendants.
A number of regulations, including the Petroleum Industry Act of 2021 and the Federal Competition and Consumer Protection Act of 2018, as well as others, are met by the import licenses granted to the defendants by the first defendant, according to the marketers.