KEY POINTS

• Dangote Refinery is seeking to void import licenses granted to NNPCL and other companies.
• The refinery is demanding N100 billion ($62.5M) in damages, claiming its business is being sabotaged.
• The court case could be resolved through an out-of-court settlement.

The Nigerian National Petroleum Corporation Limited (NNPCL) and six other businesses have been awarded import permits, which Dangote Petroleum Refinery and Petrochemicals FZE is suing to revoke on the grounds that the licenses undermine domestic output.

The corporation contends that the refinery’s operations are hampered and that the granting of these permits is against the Petroleum Industry Act.

Dispute over import licenses

The suit contests the validity of licenses granted to NNPCL, AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited. It was filed at the Federal High Court in Abuja.

Dangote Refinery asserts that since it has the production capacity to satisfy domestic demand, import licenses for goods like Automotive Gas Oil (AGO) and Jet Fuel are not required.

In order to prevent the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) from granting or extending these import permits, Dangote Refinery is requesting an injunction.

It contends that ongoing petroleum product imports violate the Petroleum Industry Act and threaten regional refineries.

Request for damages

In addition to nullifying the licenses, Dangote Refinery is demanding N100 billion ($62.5M) in damages, accusing NMDPRA of sabotaging its business operations.

The refinery claims that despite its ability to meet national demand, the issuance of import licenses allows for continued importation, leaving its products unpatronized.

The plaintiff also contends that NMDPRA has breached Sections 317(8) and (9) of the Petroleum Industry Act by not supporting local refinery production.

According to Vanguard, the company insists that import licenses should only be issued when there is a shortfall in local supply, which is not currently the case.

Furthermore, Dangote Refinery is seeking a court order directing NMDPRA to withdraw all import licenses from the named defendants and any other companies, except local refineries, involved in petroleum product importation.

Legal battle and potential settlement

Despite the refinery’s designation as a Free-Zone Enterprise, NMDPRA has threatened to impose a 0.5 percent fee on petroleum products, which the company is contesting in its case.

Dangote Refinery claims that the fee violates legal clauses that protect Free-Zone Enterprises from some financial requirements.

The business stated in its lawsuit that it is worried that foreign oil companies are working with the defendants listed to sabotage Nigeria’s attempts to rely on its own refineries.

However, because the defendants’ counsel have shown a desire to look into an out-of-court settlement, the legal processes might not progress to a full trial.

In order to provide a report on the possible settlement, the court has postponed the case until January 20, 2025.