A Federal High Court in Abuja has dismissed the Nigerian National Petroleum Company Limited’s (NNPC) request to strike out a N100 billion lawsuit filed by Dangote Refinery and Petrochemicals against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and seven other companies. The suit challenges the issuance of fuel import licenses to NNPC and other oil firms, arguing that Dangote Refinery already produces sufficient petroleum products to meet local demand.
The court’s decision, delivered by Justice Inyang Edem Ekwo on Tuesday, marks a significant development in the legal battle over fuel importation in Nigeria. Dangote Refinery, in the suit marked FHC/ABJ/CS/1324/2024, is seeking to void the import licenses granted to NNPC, Matrix Petroleum Services Limited, A. A. Rano Limited, and four other companies. The refinery is also demanding N100 billion in damages from NMDPRA for allegedly violating the Petroleum Industry Act (PIA) by issuing import licenses despite Dangote Refinery’s capacity to meet domestic fuel needs.
Details of the Lawsuit
Dangote Refinery, represented by its lawyer Ogwu James Onoja, SAN, filed the originating summons on September 6, 2024. The refinery argued that NMDPRA’s issuance of import licenses for Automotive Gas Oil (AGO) and Jet Fuel (aviation turbine fuel) contravenes Sections 317(8) and (9) of the PIA, which stipulate that import licenses should only be issued in cases of petroleum product shortages.
The refinery further contended that NMDPRA’s actions undermine local refineries and discourage domestic production. Other defendants in the suit include Aym Shafa Limited, T. Time Petroleum Limited, and 2015 Petroleum Limited.
NNPC’s Objections
NNPC, in its response, sought the outright dismissal of the suit, arguing that the court lacked jurisdiction to hear the case. The state-owned oil company also requested that its name be removed from the suit, citing discrepancies in its name as listed in the lawsuit. NNPC claimed that its correct name is Nigerian National Petroleum Company Limited, not Nigerian National Petroleum Corporation Limited, as stated in the suit.
Additionally, NNPC argued that the suit was premature and disclosed no reasonable cause of action, urging the court to reject it.
Court’s Ruling
Justice Ekwo rejected NNPC’s objections, stating that a mere error in the spelling of its name did not create any doubt about its identity. The court ordered Dangote Refinery, represented by Ibrahim George, SAN, to amend its originating summons to reflect NNPC’s correct name.
The judge also dismissed NNPC’s claim that the suit was premature, allowing the case to proceed. The matter has been adjourned to May 6 for further mention.
Implications of the Case
The lawsuit highlights the growing tension between Dangote Refinery, Nigeria’s largest private refinery, and NNPC, the state-owned oil company, over fuel importation policies. Dangote Refinery, which began operations in 2023, has the capacity to produce 650,000 barrels per day, significantly exceeding Nigeria’s daily fuel consumption.
The case raises critical questions about the implementation of the Petroleum Industry Act, particularly provisions aimed at promoting local refining and reducing dependence on fuel imports. If successful, the lawsuit could lead to a significant shift in Nigeria’s fuel importation policies, potentially boosting local refining capacity and reducing the country’s reliance on imported petroleum products.
Broader Industry Impact
The outcome of the case could have far-reaching implications for Nigeria’s oil and gas sector. A ruling in favor of Dangote Refinery may encourage other local refineries to challenge import licenses and demand greater support from regulatory authorities. Conversely, a ruling in favor of NNPC and NMDPRA could reinforce the status quo, maintaining the current importation framework.
The case also underscores the need for clarity and consistency in the implementation of the PIA, which was enacted to reform Nigeria’s oil and gas industry and promote local content development.
Next Steps
As the case proceeds, stakeholders in the oil and gas sector will be closely monitoring developments. The court’s decision on May 6 will provide further insight into the legal and regulatory landscape governing fuel importation and local refining in Nigeria.
