“Don’t Allow Dangote Monopoly; It’s a Recipe for Disaster” — Oil Marketers Urge Court

In a fresh legal standoff, three major oil marketers—AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—have urged the Federal High Court in Abuja to halt what they describe as an attempt by Dangote Petroleum Refinery and Petrochemicals FZE to establish a monopoly over Nigeria’s energy sector.

The companies argued that if Dangote Refinery is allowed to take control of the oil industry, it would destabilize the sector and lead to dire economic consequences. Their appeal is in response to a lawsuit Dangote Refinery filed to challenge the issuance of import licenses to other companies, a move the marketers say would effectively cut off their access to the Nigerian market.

Efforts to obtain a response from Anthony Chiejina, the Group Head of Communications at Dangote Group, were unsuccessful, as calls and messages went unanswered.

The current lawsuit, marked FHC/ABJ/CS/1324/2024, names the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Corporation Limited (NNPC) as co-defendants alongside the oil marketers. Dangote Refinery contends that NMDPRA acted in breach of the Petroleum Industry Act (PIA) by issuing the import licenses. The company claims it already produces enough refined petroleum products, including AGO (Automotive Gas Oil) and Jet-A1 fuel, to meet Nigeria’s daily demands, rendering additional imports unnecessary.

In its court filing, Dangote Refinery is seeking N100 billion in damages from NMDPRA for allegedly issuing licenses to other marketers. The company is also asking the court to restrict NMDPRA from issuing further import licenses and to close all storage facilities, warehouses, and tank farms used by the defendants to store imported petroleum products.

The marketers, however, argue that Dangote’s requested monopoly would lead to higher fuel prices, intensifying economic hardship across the country. “If Nigeria allows only one supplier to set prices, consumers will suffer due to rising costs,” the defendants stated in their court response, warning of potential energy insecurity if Nigeria relies solely on a single domestic supplier.

The marketers further contend that Dangote’s refinery cannot independently meet Nigeria’s demand, citing a lack of evidence to support its claims of adequate production capacity. They argued that suspending imports and granting Dangote exclusive control would expose Nigerians to the risk of shortages and price hikes.

They also emphasized that their import licenses, issued in compliance with the Petroleum Industry Act of 2021 and the Federal Competition and Consumer Protection Act of 2018, did not obstruct Dangote’s business operations, nor did they undermine local refining efforts. “The issuance of these licenses promotes competition and protects consumers from the negative impact of monopolistic practices,” the marketers asserted.

Justice Inyang Ekwo has adjourned the case to January 20, 2025, urging both parties to explore an out-of-court resolution. Dangote Refinery has expressed an openness to withdrawing the lawsuit should an agreement be reached.