Dangote Refinery, FCCPC Clash Over Petrol Monopoly

Dangote Petroleum Refinery and Petrochemicals FZE and the Federal Competition and Consumer Protection Commission (FCCPC) are engaged in a legal battle over the refinery’s N100 billion import license lawsuit and allegations of monopoly in the oil and gas sector.

According to court documents, the lawsuit, marked FHC/ABJ/CS/1324/2024, seeks to invalidate import licenses issued to several Nigerian oil companies by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). These companies include the Nigerian National Petroleum Company Limited (NNPCL), Matrix Petroleum Services Limited, A.A. Rano Limited, and four others.

Dangote Refinery is seeking N100 billion in damages against NMDPRA for allegedly continuing to issue import licenses to these companies for products such as Automotive Gas Oil (AGO) and Jet Fuel, despite sufficient domestic production.

The refinery’s lawyers, Dr. Ogwu James Onoja, SAN, and George Ibrahim, SAN, argued that NMDPRA violated Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing import licenses without a proven shortfall in supply.

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Matrix Petroleum Services Limited, A.A. Rano Limited, and AYM Shafa Limited filed a motion to dismiss the case, asserting that only NMDPRA and NNPCL have the authority to determine petroleum product shortfalls in Nigeria.

NNPCL’s counsel, Ademola Abimbola, SAN, filed a preliminary objection, claiming that the plaintiff mistakenly sued a non-existent entity instead of the correctly registered Nigerian National Petroleum Company Limited.

In response, George Ibrahim argued that the plaintiff’s complaint concerns the “flagrant disobedience of the Petroleum Industry Act (PIA) by a statutory body.”

The case is pending before Justice Inyang Ekwo, with the next proceedings scheduled for February 5, 2025.

Meanwhile, the FCCPC filed a motion on January 5, 2025, seeking to join the lawsuit as a co-defendant. The FCCPC legal team, led by Barrister Olarenwaju Osinaike, argued that its interest would be impacted by the outcome of the suit, raising concerns about anti-competition and monopoly in the petroleum industry.

The FCCPC asserted that Nigeria operates a free-market economy and that its role includes eliminating anti-competitive practices. They contended that the FCCPC Act does not permit monopolistic activities in product manufacturing and distribution, including oil and gas.

Dangote Refinery responded that its suit aims to revamp local refining of petroleum products and that NMDPRA should only grant import licenses in line with Section 317(8) and (9) of the Petroleum Act, which permits import only when there is a shortage in local production.

The refinery further argued that the FCCPC should not join the suit as it has no jurisdiction in a case revolving around the Petroleum Industry Act, suggesting that the FCCPC should seek a legislative amendment if it has concerns about the petroleum sector.

The court will make a decision on the FCCPC’s application in the upcoming proceedings.