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Oil Marketers Oppose Dangote’s Quest for Import Control

Written by Agboola Oluwafemi on November 7, 2024

News Views: 313

Three major oil marketers, AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—have petitioned the Federal High Court in Abuja to dismiss a suit filed by Dangote Petroleum Refinery and Petrochemicals.

The marketers assert that Dangote’s push to dominate petroleum importation would destabilize Nigeria’s oil sector. They argue that a monopoly would jeopardize competitive pricing, and unleash untold hardship on Nigerians, posing severe risks to the national economy.

In the original September 6, 2024 filing, Dangote’s refinery argued that the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) violated Section 317 of the Petroleum Industry Act (PIA) by issuing import licenses under circumstances not involving a product shortfall, allegedly hindering the growth of local refineries.

In response, the marketers countered that Dangote lacks evidence of its capacity to supply sufficient petroleum for Nigeria’s needs. They argue that exclusive production control could lead to unregulated price hikes and potential supply crises in the event of refinery disruption, putting Nigeria’s energy security at risk.

The marketers, affirming their right to import licenses, emphasize that the licenses were legally issued under the PIA, Federal Competition and Consumer Protection Act, and other laws. They further warned that any halt to oil imports in favor of Dangote’s monopoly could be disastrous, noting that Nigeria’s energy security should not depend solely on one producer.

A failure in Dangote’s production would leave the country without a fallback for at least 30 days, the minimum time required to secure alternative fuel imports.

The court has scheduled a follow-up hearing for January 20, 2025.

Simultaneously, Dangote Refinery, a 650,000-barrel-per-day facility, has been reshaping global fuel trading, with three international companies, Vitol Group, Trafigura Group, and BP Plc, accounting for 75% of its exports. Since commencing operations, Dangote’s exports have reached approximately 6 million tons of fuel, equal to nearly 45 million barrels, as per data from Precise Intelligence.

In October, the refinery processed roughly 420,000 barrels of crude per day, indicating a substantial contribution to balancing regional fuel supplies across Africa and Europe.