Nigerian marketers warn of potential economic risks as they oppose Dangote’s alleged bid for monopoly in the industry, presenting their case in court. Discover the arguments and implications for Nigeria’s economy.
Three prominent oil marketers have informed the Federal High Court in Abuja that the proposed monopoly of the energy sector by Dangote Petroleum Refinery poses a significant threat to the nation’s oil industry.
The marketers assert that Dangote’s intention to dominate the oil sector is a formula for catastrophe in the country.
The three companies—AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—in their responses to a lawsuit filed by Dangote Petroleum, referenced as FHC/CS/ABJ/1324/2024, argued before the court that the plaintiff does not produce sufficient petroleum products to meet the daily needs of Nigerians, and there is no evidence presented to the court to support any contrary claim.
In September 2024, Dangote initiated legal action against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigeria National Petroleum Corporation Limited (NNPCL), AYM Shafa Limited, A.A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.
In the lawsuit dated September 6, 2024, Dangote requested the court to declare that NMDPRA has violated sections 317(8) and (9) of the Petroleum Industry Act (PIA) by granting licenses for the importation of petroleum products.
Dangote contended that such licenses should only be issued in situations where there is a shortfall in petroleum products.
Additionally, he sought a declaration from the court that NMDPRA has failed in its statutory duties under the PIA by not promoting local refineries like Dangote Refinery.
However, the marketers, in their counter affidavit dated November 5, 2024, and sworn by Ali Ibrahim Abiodun, asserted that they are fully qualified and entitled to receive import licenses from the first defendant to import petroleum products in Nigeria, as defined by Section 317(9) of the Petroleum Industry Act.
They argued that granting Dangote a monopoly over Nigeria’s petroleum industry, as sought in the current lawsuit, would undermine competitive pricing of petroleum products in the country.
They contended that granting Dangote a monopoly over Nigeria’s petroleum sector, as sought in the current lawsuit, would undermine competitive pricing for petroleum products in the nation, exacerbate the already fragile state of Nigeria’s economy, and impose significant hardships on the populace, all of which could lead to a catastrophic situation within the political landscape.
They informed the court that should Nigeria concentrate all its energy resources by ceasing the importation of petroleum products and permitting Dangote to become the exclusive producer and supplier, with the authority to set prices, the cost of petroleum products would inevitably escalate, jeopardizing the nation’s energy security.
They stated, “If Nigeria concentrates all its energy resources by halting the importation of petroleum products and allowing the Plaintiff to be the exclusive producer and supplier in the country, with the freedom to dictate pricing, the costs of petroleum products in Nigeria will continue to increase, and energy security will be compromised.
“In the event of any disruption or failure in the Plaintiff’s production chain that prevents it from operating, Nigeria would face an energy crisis, as the country lacks sufficient reserves to sustain itself for at least 30 days, which would be necessary to order, finance, transport, and import refined products into storage in Nigeria.
“Given the evident lack of credible and demonstrable evidence that the Plaintiff is capable of refining and supplying sufficient petroleum products for the daily needs of Nigerians, granting the Plaintiff (Dangote) judicial approval to act as the sole supplier of refined petroleum products would foster a monopoly in a critical segment of Nigeria’s oil industry, posing a significant risk to the stability of the nation’s energy sector.”
The court was informed that granting the reliefs requested by Dangote, which are intended to establish him as a monopolist in Nigeria’s petroleum industry, would effectively place Nigeria and its citizens at the mercy of the company regarding the availability and pricing of petroleum products within the country.
In their response, they contended that they are fully entitled to the import licenses granted to them by the first defendant, having satisfied all legal prerequisites for the issuance of such licenses prior to their approval.
“The import licenses that were lawfully and validly issued to the defendants have not in any manner hindered the plaintiff’s business or its refinery operations.
“The import licenses provided to the defendants by the first defendant comply with the stipulations of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other applicable legislation,” the marketers emphasized.
