Three oil companies (Matrix Petroleum Services Limited, AA Rano Limited and AYM Shafa Limited) have petitioned the Federal High Court in Abuja to restrain the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) from reviewing or withdrawing their import licences.

They also asked the court not to stop them from importing oil in the interest of energy security and the promotion of healthy competition in Nigeria’s oil and gas sector.

This is stated in its legal proceedings in response to the suit filed by Dangote Petroleum Refinery and Petrochemicals FZE, which seeks to annul the import licenses granted to Nigerian National Petroleum Corporation Limited (NNPCL) and five other companies for importing refined petroleum products that Dangote It already produces in the country, without shortage.

In their written direction and counter affidavit, dated November 5, 2024, and filed by Ahmed Raji SAN, it was stated that the business of the respondents does not hinder, disrupt or harm in any way the operations of Dangote Refinery.

The three defendants claim that the plaintiff is allegedly seeking to monopolize the oil industry in Nigeria, where he alone would control supply, distribution and prices.

Raji emphasized that countries around the world ensure energy security, noting that even nations like the United States, where oil reserves and refining capacity are much larger than Nigeria, still import and store petroleum products to protect themselves. against unforeseen circumstances and ensure a constant supply, thus ensuring energy. security.

Dangote Refinery’s claims in court and new counterclaims by the defendants

In suit number FHC/ABJ/CS/1324/2024, Nairametrics exclusively reported that Dangote Refinery seeks N100 billion in damages against NMDPRA for allegedly continuing to issue import licenses to NNPCL, Matrix and other companies to import petroleum products such as automotive gas oil (AGO) and jet fuel (aviation turbine fuel). , “even though the Dangote refinery produces AGO and Jet-A1 in quantities that exceed the current daily consumption of petroleum products in Nigeria.”

The defendants in the case include NMDPRA, NNPCL, AYM Shafa Limited, AA Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited and Matrix Petroleum Services Limited (1st to 7th defendants).

• In the original summons, dated September 6, 2024, and seen exclusively by Nairametrics, the plaintiff’s lawyer, Ogwu James Onoja SAN, asked the court to declare that the NMDPRA allegedly violates Sections 317 (8) and (9) of the Petroleum Law. Industry Law (PIA) through the issuance of import licenses for petroleum products. He argued that such licenses should only be granted in cases of shortage of petroleum products.

• He also urged the court to declare that the NMDPRA violated its legal responsibilities under the PIA by not encouraging local refineries like the Dangote Refinery.

• At the first hearing held in October, before Justice Inyang Ekwo, George Ibrahim SAN, counsel for the plaintiff, informed the judge that talks were taking place between the parties to potentially resolve the matter.

• He requested an adjournment to give the parties time to reach an agreement, suggesting that the court should adjourn for a report on the agreement or the status of service.

The judge granted the postponement.

In the affidavit of the respondents, deposed by Ali Ibrahim Abiodun, Acting Managing Director of AYM Shafa (with the consent and authority of Matrix, AA Rano and AYM), it was stated that the respondents are qualified and capable of obtaining a license as importers of refined petroleum products under Section 317(9) of the PIA and that their licenses to import such products were lawfully issued by the competent authority, the NMDPRA.

• The affidavit further stated that since Dangote Refinery began refining petroleum products, AYM Shafa has been a major buyer of the plaintiff, having procured about 116,000,000 liters of AGO and hundreds of metric tonnes of Premium Motor Spirit (PMS), despite Dangote’s alleged inability to meet the full demand.

• The deponent stated that it normally takes the Dangote Refinery an average of two months to fulfill orders and rarely meets demand, with trucks waiting for months to be loaded at the refinery.

• On the contrary, he stated that it takes about three weeks to import petroleum products from marine refineries.

• The affidavit revealed that the AA Rano oil depot in Lagos has a storage capacity of 55,000,000 liters and can load about 200 trucks every 24 hours.

• The deponent stated that the company also owns 220 service stations and another 85 subsidiaries and leased service stations.

According to the declarant, AA Rano was one of the first to receive AGO from the Dangote Refinery, loading 20,000 MT of AGO around April 16, 2024, and has since purchased and loaded additional shipments totaling approximately 190,000,000 liters.

Despite this sponsorship, the affidavit states that Dangote Refinery has continued to place obstacles that make it difficult for AA Rano to purchase products solely from the refinery.

“Oil, in both its crude and refined forms, is an international commodity that is traded globally, and there are universally accepted trading practices and platforms that ensure the fairness and sanctity of contracts in the industry.” stated the declarant.

He further argued that the plaintiff abandoned fair trade practices and instead introduced a policy requiring buyers to deposit 110% of the value of their orders in letters of credit (LC), and that the actual price of the product is only revealed five days after the date of purchase. LC date, i.e. after the product has been loaded from the Dangote refinery.

He stated that this practice allegedly leaves buyers uncertain about the final cost until after delivery, often forcing them to sell at a loss and placing marketers, consumers and Nigeria at the mercy of the plaintiff.

“The landing costs of the imported products, including shipping, insurance and customs charges, are cheaper than the wholesale price offered by the plaintiff for its products, which are not subject to customs duties and are less expensive to transport to our warehouses.” the affidavit stated.

The lead lawyer emphasized that his clients have never obtained any advantage that could harm or harm the plaintiff.

He urged the court to dismiss the lawsuit.

Nairametrics reports that the case is scheduled for hearing on January 20, 2025 for a status report.

What you should know

When Dangote’s lawsuit became public, the Dangote Group It later issued a statement describing the lawsuit against NNPC Limited and other oil companies as “an old issue.”

• In a statement dated October 21, 2024, the group’s communications officer, Anthony Chiejina, clarified that Dangote Refinery plans to withdraw the lawsuit by January 2025.

“This is an old matter that began in June and culminated in a matter filed on September 6, 2024,” the statement read.

“The parties are currently in talks following President Bola Tinubu’s directive on sales of crude oil and refined products in Naira, which was approved by the Federal Executive Council (FEC). “We have made significant progress and events have since surpassed this development.”

“No party has been notified of legal proceedings and there is no intention to do so. We have agreed to stop the process. It is important to emphasize that no orders have been issued and there are no adverse effects for either party. “We hope to formally withdraw the matter from court in January 2025.”

Recall that Africa’s richest man, Aliko Dangote, had announced his willingness to sell his multi-billion dollar oil refinery to the state-owned energy company NNPC Limited.

This decision came amid growing disputes with regulatory authorities and capital partners, prompting reflection on its investment options in Nigeria.

Dangote was also seen alleging the importation of substandard petroleum products into Nigeria by others.

Nairametrics earlier reported that the federal government subsequently granted marketers the license to purchase petroleum products directly from the Dangote refinery following NNPC’s decision to step down as an intermediary between the two parties.

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