In a counter affidavit filed by Idris Musa, a Senior Regulatory Officer at NMDPRA, in response to a suit filed by Dangote Petroleum Refinery and Petrochemicals FZE, the authority clarified its position.
The application, dated December 13, 2024, stated that Dangote Refinery’s current production levels have yet to meet the national daily petroleum products sufficiency requirements.
“Consequently, and in compliance with Section 317(9) of the Petroleum Industry Act (PIA), the 1st defendant (NMDPRA) issued licenses to import petroleum products to bridge product shortfalls to companies with good track records of international product trading,” Musa said.
Dangote Refinery has filed a suit against NMDPRA and the Nigeria National Petroleum Corporation Limited (NNPCL), with AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited also named as defendants.
The oil company, represented by its lawyer, Ogwu Onoja, SAN, is seeking to have the import licenses issued to these entities declared null and void. Additionally, they request the court to rule that NMDPRA violated Sections 317(8) and (9) of the PIA by issuing the licenses and demand N100 billion in damages.
NMDPRA, in its defense, requested the court to dismiss the suit, describing it as unfounded and without merit. Musa emphasized that Dangote Refinery is not entitled to the reliefs sought, noting that one of NMDPRA’s key responsibilities is to ensure a vibrant petroleum sector that adheres to international best practices and guarantees national energy security.
Musa further explained that NMDPRA is committed to preventing market abuse, monopoly, and dominance by any single entity, which could control the supply chain and impact the lives of over 200 million Nigerians.
He also noted that NMDPRA has supported local refineries in maximizing their capacity to contribute to national energy security.
As of July 18, 2024, there are four functional licensed modular refineries, with four other refineries owned by NNPCL at various stages of maintenance.
Musa stated that, in the second quarter of 2024, both Dangote Refinery and the four functional modular refineries produced significant volumes of Automotive Gas Oil (AGO) and Aviation Turbine Kerosene (ATK).
While NMDPRA continues to monitor the situation to determine when locally refined products will meet national demand, Musa pointed out the uncertainties surrounding Dangote Refinery’s ability to meet the petroleum products needs of the entire country in both the short and long term.
Musa also rejected the claim that NMDPRA’s demand for a 0.5% levy on sales of petroleum products was unjustified. He explained that the levy, as stipulated by Sections 47(2)(c) and 52(7) of the PIA, applies to wholesale customers, not producers. He clarified that Dangote Refinery, as a free zone entity, must still comply with these regulations.
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The official further disputed the plaintiff’s claim that its refinery is exempt from paying levies, taxes, and rates under the Dangote Industries Free Zone Regulation 2020.
He emphasized that Dangote Refinery is allowed to sell its products internationally, but also has a responsibility to meet domestic demand, which is why NMDPRA issues import licenses to qualified entities.
Musa reiterated that Dangote Refinery, as of now, lacks the capacity to meet Nigeria’s entire demand for refined petroleum products, and that it is NMDPRA’s role to license companies that can fill any supply gaps.
He insisted that issuing licenses to the companies involved is crucial to prevent hardship and ensure sufficient product availability.
Lastly, he denied any claims of a “grand conspiracy” against Dangote Refinery, labeling them as unsupported by evidence.
Earlier, NNPCL had filed a preliminary objection on November 15, 2024, urging the court to dismiss the case for incompetence.
Additionally, oil marketers AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited filed a joint counter affidavit on November 5, 2024, warning that granting Dangote’s application could lead to disaster in the country’s oil sector.
They argued that Dangote Refinery has not produced enough petroleum products to meet national consumption needs, a claim they said was unsupported by any evidence.
Justice Ekwo has scheduled a hearing for Monday, January 20, 2025, to report on settlement progress or service.