Dangote Petroleum Refinery and Petrochemicals FZE and the Federal Competition and Consumer Protection Commission (FCCPC) are locked in a legal dispute over allegations of monopoly in Nigeria’s petroleum sector and the issuance of import licenses.
The case, filed under suit number FHC/ABJ/CS/1324/2024 at the Federal High Court in Abuja, challenges the Nigerian Midstream and Downstream Petroleum Regulatory Authority’s (NMDPRA) decision to grant import licenses to several oil companies, including the Nigerian National Petroleum Company Limited (NNPCL), Matrix Petroleum Services Limited, A.A. Rano Limited, and four others.
Case Overview
Dangote Refinery seeks N100 billion in damages from NMDPRA, claiming that the regulator continues to issue import licenses for petroleum products such as Automotive Gas Oil (AGO) and aviation turbine fuel, despite adequate local production.
The refinery argues that issuing these licenses violates Sections 317(8) and (9) of the Petroleum Industry Act (PIA), which restricts importation to cases where there is a proven supply shortfall.
Three oil companies—Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited—have filed motions urging the court to dismiss the case. They argue that only NMDPRA and NNPCL have the authority to determine supply shortfalls, not Dangote Refinery.
NNPCL’s legal team, led by Ademola Abimbola, SAN, challenges the lawsuit on technical grounds, stating that Dangote Refinery mistakenly sued the defunct “Nigeria National Petroleum Corporation” instead of the legally registered “Nigerian National Petroleum Company Limited.”
Abimbola also argues that NMDPRA has no legal obligation to restrict import licenses solely based on local production capacity unless it formally implements the Backward Integration Policy for the downstream sector.
FCCPC Moves to Join the Case
On January 5, 2025, the FCCPC files a motion seeking the court’s permission to join the lawsuit as a co-defendant.
The FCCPC, represented by Barrister Olarenwaju Osinaike, argues that the case raises concerns about anti-competitive practices and the potential creation of a monopoly in favor of Dangote Refinery. The commission states that restricting import licenses for competing companies could harm Nigeria’s free-market economy and violate consumer protection laws.
FCCPC highlights its mandate to prevent monopolistic practices and anti-competitive agreements, stating that “there are grounds to believe that Dangote Refinery is attempting to monopolize petroleum production and distribution through legal means.”
The commission insists that its involvement is necessary to protect competition and ensure fair access to the petroleum market. It also emphasizes that the FCCPC Act prohibits monopolistic activities in all sectors, including oil and gas.
Dangote Refinery’s Response
In a counter-affidavit, Dangote Refinery rejects FCCPC’s claims, maintaining that its lawsuit is not about monopoly but rather aimed at strengthening domestic petroleum refining in line with Nigeria’s economic objectives.
The refinery’s legal team argues that it operates under a valid license from NMDPRA, allowing it to refine and distribute petroleum products. They insist that NMDPRA should only issue import licenses when there is a genuine supply shortfall, as outlined in the Petroleum Industry Act.
Dangote Refinery also challenges FCCPC’s attempt to join the case, arguing that the commission has no jurisdiction over petroleum licensing matters, which fall under the PIA. The refinery describes FCCPC’s involvement as unnecessary and suggests that if the commission has concerns, it should seek legislative amendments rather than interfere in an ongoing legal case.
Next Court Hearing
The case is currently before Justice Inyang Ekwo, with the next court session scheduled for February 5, 2025. The judge is expected to rule on FCCPC’s request to be added as a party to the lawsuit.
Industry Context
Aliko Dangote, owner of the refinery, has previously raised concerns about the importation of substandard petroleum products into Nigeria. Amid regulatory challenges and disputes with stakeholders, he has indicated a willingness to sell shares of the multibillion-dollar refinery to NNPCL.
In a related development, the federal government recently allows petroleum marketers to purchase products directly from Dangote Refinery, following NNPCL’s decision to step back as an intermediary between the refinery and local marketers.
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