Dangote Refinery Challenges Import Licenses Issued to NNPC, Matrix, A. A. Rano, Other Companies

Dangote Petroleum Refinery and Petrochemicals FZE has filed a lawsuit at the Federal High Court in Abuja, seeking to invalidate import licenses granted to the Nigeria National Petroleum Company (NNPC) Limited, Matrix Petroleum Services Limited, A. A. Rano Limited, and four other companies. 

The refinery argued that these licenses, which allow the importation of refined petroleum products, are unnecessary as Dangote is already producing enough to meet Nigeria’s demands.

In the case (suit number FHC/ABJ/CS/1324/2024), Dangote Refinery is also demanding N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). 

The company claimed that despite producing Automotive Gas Oil (AGO) and Jet Fuel (Jet-A1) in quantities that exceed Nigeria’s daily consumption, NMDPRA continues to issue import licenses to companies, including NNPCL and Matrix.

The defendants named in the lawsuit include NMDPRA, NNPC, Aym Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.

In a court submission dated September 6, 2024, Dangote’s legal representative, Ogwu James Onoja, SAN, asked the court to declare that NMDPRA is allegedly violating Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing these licenses. According to the law, import licenses should only be granted when there is a shortfall in the local supply of petroleum products.

The plaintiff also requested the court to declare that NMDPRA is failing in its duty to support local refineries, such as Dangote Refinery, as required by the PIA.

Ahmed Hashem, the Group General Manager of Government and Strategic Relations at Dangote Refinery, stated in an affidavit that the import licenses are severely harming the company. He explained that the refinery has invested billions of US dollars, but its products are largely being ignored due to NMDPRA’s actions.

Hashem also revealed that NMDPRA is threatening to impose a 0.5% levy on the refinery for wholesale transactions, as well as another 0.5 percent levy to the Midstream and Downstream Gas Infrastructure Fund (MDGIF), despite regulations exempting Free Zones from such charges. This, he argued, contradicts the purpose of Free Zones, which are meant to promote competition, attract foreign investment, and provide tax benefits.

He further claimed that international oil companies, in collaboration with the defendants, are working against Nigeria’s efforts to develop its own refinery. According to him, these interests are unhappy that an indigenous refinery, like Dangote, is poised to solve the country’s energy challenges and boost the economy.

“The intervention of the Honourable Court has become necessary in order to stem the incessant violation of statutory provisions by the 1st Defendant in favor of other entities such as the 2nd to 7th defendants,” the plaintiff stated.

The refinery’s legal team stated that the plaintiff is greatly distressed, and its investments risk being jeopardized unless the Honourable Court intervenes.

He sought an order of injunction restraining the 1st Defendant from further issuing and/or renewing import licenses to the 2nd to 7th defendants or other companies for the purpose of importing petroleum products.

In addition to a restraining order against the import licenses of the affected companies, the plaintiff sought “General damages in the sum of N100,000,000,000 against the 1st Defendant (NMDPRA) and an order of court directing the 1st Defendant to seal off all tank farms, storage facilities, warehouses, and stations used by the defendants for the storage of all refined petroleum products imported into Nigeria.” 

The plaintiff partly sought other reliefs like a declaration that by the provisions of Section 8(1) of the Nigerian Export Processing Zone Act (NEPZA), Sections 23(h) and 55(1) of the Companies Income Tax Act (CIT Act), Paragraph 6 of the Second Schedule to the CIT Act, Regulation 54(2)(a)(i) of the Dangote Industries Free Zone Regulation 2020, and the Finance Act, the plaintiff, being an entity duly registered as a Free-Zone Enterprise, is exempted from all federal, state, and local government taxes, levies, and other rates.

“A declaration that it is against the NEPZA Act, CIT Act, Finance Act, and Dangote Industries Free Zone Regulation 2020, as well as legislative intent, for the 1st Defendant to impose or threaten to impose on the plaintiff an additional financial obligation of a 0.5 percent levy meant for off-takers of petroleum products directly and an additional 0.5 percent wholesale levy in favor of the Midstream Downstream Gas Infrastructure Fund (MDGIF).

“An order of mandatory injunction directing the 1st Defendant to withdraw immediately all import licenses issued to the 2nd-7th defendants and other companies other than the plaintiff and other local refineries for the purpose of importing refined petroleum products into Nigeria.

“An order of injunction restraining the 1st Defendant from imposing and demanding a 0.5 percent levy meant for off-takers of petroleum products directly and an additional 0.5 percent wholesale levy in favour of MDGIF or any other levy or sum against the plaintiff.”