AYM Shafa, A. A. Rano, And Matrix Petroleum Challenge Dangote Refinery’s Bid To Nullify Import Licenses

Three major oil marketers in the country, yesterday, asked the Federal High Court in Abuja to stop what they described as plot by Dangote Petroleum Refinery and Petrochemicals FZE, to monopolise the energy sector of the economy.

The marketers, including AYM Shafa Limited, A. A. Rano Limited and Matrix Petroleum Services Limited, maintained that allowing Dangote Refinery to takeover the oil sector would spell doom for the country.

However, efforts made to reach the Group Head, Communications, Dangote Group, Mr. Anthony Chiejina, last night, were unsuccessful as several calls made to his known mobile phone were unanswered, while text and WhatsApp messages were not also responded to at press time.

The companies took the position in a reply they filed to challenge the competence of the suit Dangote’s firm filed to nullify licenses they secured to import refined petroleum products into the country.

The marketers were cited as defendants in the suit marked: FHC/ABJ/CS/1324/2024, which also has the Nigeria Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, and the Nigeria National Petroleum Corporation Limited, NNPC, as defendants.

It will be recalled that Dangote Refinery had, in its suit, queried the propriety of licences issued to other key oil marketers to bring refined petroleum products into the country when it has not recorded any shortfall in its own operations.

According to the plaintiff, NMDPRA acted in breach of Sections 317(8) and (9) of the Petroleum Industry Act, PIA, by issuing licenses for the importation of petroleum products to the defendants.

The plaintiff told the court that the licences were issued to the defendants, “despite the production of AGO and Jet-A1 that exceeds the current daily consumption of petroleum products in Nigeria by Dangote Refinery.”

It, therefore, prayed the court to award N100billion in damages against the NMDPRA for allegedly continuing to issue import licenses to NNPCL and the other defendants for the import of petroleum products, such as Automotive Gas Oil, AGO, and jet fuel (aviation turbine fuel) into Nigeria.

Specifically, Dangote Refinery, among other things, applied for an order of injunction, restraining the 1st defendant (NMDPRA) from further issuing and/or renewing import licenses to the 2nd to 7th defendants or other companies for the purpose of importing petroleum products.

It further sought an order of court directing the 1st defendant to seal off all tank farms, storage facilities, warehouses, and stations used by the defendants for the storage of all refined petroleum products imported into Nigeria.

“An order of mandatory injunction directing the 1st defendant to withdraw immediately all import licenses issued to the 2nd-7th defendants and other companies other than the plaintiff and other local refineries for the purpose of importing refined petroleum products into Nigeria.

“An order of injunction restraining the 1st defendant from imposing and demanding a 0.5% levy meant for off-takers of petroleum products directly and an additional 0.5% wholesale levy in favour of MDGIF or any other levy or sum against the plaintiff.”

However, in their reply to the suit, dated November 5, 2024, the three marketers told the court that the plaintiff does not produce adequate petroleum products for the daily consumption of Nigerians, saying there was nothing before the court to prove the contrary.

The defendants told the court that they were well qualified and entitled to be issued a licence by the 1st defendant to import petroleum products into the country within the provisions of Section 317(9) of the PIA.

They argued that vesting the plaintiff with the power of monopoly in Nigeria’s petroleum industry, as it was seeking through the legal action, would kill competitive pricing of petroleum products in the country, further deteriorate Nigeria’s critically ailing economy “and unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity.

“That if Nigeria puts all her energy eggs in one basket by stopping importation of petroleum products and allowing the Plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products in Nigeria will continue to rise and energy security will elude Nigeria.

“That in the event of any breakdown in or obstruction to the production chain of the plaintiff which stops it from producing, Nigeria will be thrown into energy crises as Nigeria does not have the reserves that would last it for the at least 30 days that it would need to order, pay for, freight and import refined products into tanks in Nigeria.

“That amid the glaring absence of any credible and demonstrable proof that the Plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians, giving the plaintiff 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,” the defendants added.

They insisted that granting the reliefs sought by the plaintiff, which is aimed at making it a monopolist in Nigeria’s petroleum sector, would leave Nigeria and Nigerians at the mercy of the olaintiff, with respect to availability and cost of purchasing petroleum products in the country.

More so, the defendants told the court that they were fully qualified for the import licences issued to them by the 1st Defendant, as they duly met all the legal requirements.

“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the Plaintiff’s business or its refinery.

“The import licences issued to the defendants by the 1st defendant are in line with the provisions of Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018 and other relevant laws,” the defendants averred.

Justice Inyang Ekwo had earlier adjourned the matter till January 20, 2025, to enable the parties explore an out-of-court settlement of the dispute, even as the plaintiff expressed its readiness to withdraw the suit.