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Dangote faces price war as NNPC backs fuel imports

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The Nigerian National Petroleum Company Limited has told the Federal High Court sitting in Lagos that petroleum products from the Dangote Petroleum Refinery and Petrochemicals FZE are sold at “significantly high and fluctuating market prices”, warning that granting the refinery’s requests could hand it monopoly control of Nigeria’s downstream petroleum sector.

The national oil company stated this in a counter-affidavit in opposition to Dangote refinery’s originating summons in Suit No: FHC/L/CS/857/2026 before the Federal High Court, Lagos Judicial Division.

Similarly, marketers under the aegis of the Petroleum Products Retail Outlet Owners Association of Nigeria supported the NNPC, saying competition must be allowed in the petroleum sector to prevent what it called price exploitation, saying multiple sources privy would bring about a reduction in fuel prices.

In the counter-affidavit, a copy of which was obtained by our correspondent, the NNPC asked the court to dismiss or strike out the suit on grounds that it was incompetent, premature, disclosed no cause of action, and constituted an abuse of court process.

Dangote tackles importers

The PUNCH reports that the Dangote refinery had challenged the issuance of petrol import licences to marketers and the Nigerian National Petroleum Company Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The PUNCH reports that the NMDPRA recently approved licences for the importation of over 700,000 metric tonnes of petrol despite claims that the Dangote refinery now supplies more than 90 per cent of the nation’s daily PMS consumption.

The Dangote refinery had dragged the Attorney-General and the NNPC before the court, asking it to void import permits granted by the NMDPRA to fuel importers, arguing that the licences violated existing regulations and an earlier court order to maintain the status quo.

Dangote had accused the NNPC and others of sabotaging the $20bn investment, especially by denying it crude supplies and resorting to fuel importation when it has the capacity to produce what the country needs in terms of petrol, diesel, and others.

NNPC responds

Responding, the NNPC said it would raise a preliminary objection challenging the competence of the suit and the refinery’s locus standi. “The plaintiff’s suit is premature; the plaintiff lacks locus standi,” the affidavit said.

The state oil company declared that Dangote refinery’s petroleum products were already expensive and subject to price swings dictated by commercial interests. “The plaintiff’s petroleum products are already sold at significantly high and fluctuating market prices, dictated by its commercial interests,” the company said.

NNPC accused the refinery of forum shopping, saying, ”The institution of multiple actions by the plaintiff in respect of substantially the same subject matter and reliefs constitutes an abuse of court process and amounts to forum shopping.”

The company argued that the Dangote refinery had earlier filed a similar action before the Abuja Judicial Division of the Federal High Court in Suit No. FHC/ABJ/CS/1324/2024 against the NMDPRA and six others over import licences and levies before later withdrawing the case and instituting another action in Lagos.

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NNPC maintained that there was no evidence showing the refinery could independently satisfy Nigeria’s petroleum product demand. “There is no credible, independent, or verifiable evidence before this honourable court establishing that the plaintiff presently satisfies the petroleum product demands of Nigeria,” NNPC argued.

The national oil company added that the refinery failed to provide independently verified evidence establishing the country’s actual daily consumption needs or proof of its ability to guarantee an uninterrupted nationwide supply.

“The plaintiff has failed to place before this Honourable Court any comprehensive or independently verified evidence establishing the actual daily national consumption rate of petroleum products in Nigeria or the plaintiff’s ability to guarantee uninterrupted nationwide petroleum supply independently,” it was said.

NNPC also argued that the refinery’s production claims were insufficient to justify restricting imports, stressing, “The plaintiff’s alleged production figures are selective, incomplete, and incapable of establishing nationwide product sufficiency.”

The company stressed that fuel supply obligations go beyond refining capacity alone, as they necessarily involve logistics, strategic storage, product evacuation, distribution, haulage, transportation, and strategic reserve management.

NNPC warned that depending on a single operator for national fuel supply would endanger Nigeria’s energy security. “Reliance on a single supplier within the petroleum industry poses grave risks to national energy security,” it was stated.

The company added that restricting imports in the manner sought by the refinery could trigger severe supply crises nationwide. “Restricting importation channels in the manner sought by the plaintiff would expose Nigeria to severe risks of petroleum shortages, supply disruptions, price instability, distribution failures, and national energy crises,” the affidavit read.

NNPC further told the court that any operational interruption, shutdown, or disruption affecting the Dangote refinery operations in Nigeria would result in severe petroleum shortages if alternative importation and supply channels are eliminated.

The company accused the refinery of attempting to edge out other participants in the downstream supply chain. It warned that granting the refinery’s requests could create monopoly control in the petroleum sector.

“The reliefs sought by the plaintiff are aimed at substantially restricting or eliminating other participants within the petroleum importation and supply chain. The grant of the plaintiff’s reliefs would effectively expose Nigeria’s petroleum sector to monopoly control and undermine competitive participation within the industry,” the affidavit stated.

NNPC warned the court that a monopoly in the sector would hurt consumers and destabilise the economy by distorting market competition, undermining pricing stability, reducing supply flexibility, and exposing the Nigerian economy to “substantial risks”.

The company defended the continued issuance of import licences by regulators, insisting they were lawful and necessary for energy security and market stability, saying this does not contravene Section 317(9) of the Petroleum Industry Act, 2021.

The oil company told the court that Section 317(8) of the PIA merely gave regulators discretionary powers regarding backward integration policy and did not impose a mandatory ban on imports.

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“Section 317(9) of the Petroleum Industry Act expressly contemplates the issuance of import licences to companies with active local refining licences or proven track records in international crude oil and petroleum products trading.

“Section 317(8) of the Petroleum Industry Act merely provides that the Authority may apply a Backwards Integration Policy in the downstream petroleum sector, thereby conferring discretionary powers on the regulatory authorities rather than imposing a mandatory prohibition on petroleum importation,” it added.

NNPC specifically defended the roles of the Nigerian Upstream Petroleum Regulatory Commission and the NMDPRA in the dispute, saying, “The 2nd Defendant, NMDPRA, NUPRC and other relevant agencies of government have not frustrated the plaintiff in the execution of its business objectives or refinery operations in any manner whatsoever.”

NNPC also denied allegations of sabotage and deliberate denial of crude oil supply to the refinery. “The government and the 2nd Defendant have not deliberately denied the plaintiff a crude oil supply,” the company stated.

It added, “Contrary to the plaintiff’s allegations, the 2nd Defendant has not sabotaged the plaintiff’s refinery operations.”

According to the affidavit, crude oil supply arrangements are influenced by “operational realities, commercial arrangements, security considerations, production levels, logistical constraints, and contractual obligations.”

The company insisted that all actions relating to importation, licensing, supply, and distribution were undertaken strictly in line with the Petroleum Industry Act, market realities, and national interest considerations.

NNPC further argued that the refinery was only one of several operators in the industry and could not override the rights of other participants, saying it is the supplier of last resort.

The latest court battle is the second significant legal confrontation yet between Dangote refinery and major government oil agencies since the commencement of operations at the multibillion-dollar Lekki-based refinery owned by billionaire businessman Aliko Dangote.

The Dangote refinery withdrew the 2024 suit following the Federal Government’s intervention. The dispute is rooted in disagreements over petroleum importation, crude oil supply arrangements, market competition, and the implementation of the Petroleum Industry Act following the deregulation of Nigeria’s downstream oil sector.

Since the removal of the petrol subsidy in 2023, fuel prices have been largely determined by market forces, forcing marketers, importers, refiners, and regulators into intense competition over supply control and pricing.

The Dangote refinery had once been attacked by some marketers over incessant petrol price reductions, which they said impacted their sales negatively. The refinery, which commenced petrol production in 2024 after years of delay and huge capital investment, has repeatedly pushed for stronger government support for local refining and restrictions on fuel imports, arguing that continued importation undermines domestic refining capacity.

The refinery had earlier accused regulatory authorities of issuing import licences despite local refining output being able to meet domestic demand.

However, NNPC, oil marketers, and regulators have consistently maintained that Nigeria still requires multiple supply channels because of distribution challenges, emergency supply considerations, strategic reserve obligations, and uncertainties surrounding nationwide consumption levels.

See also  Nigeria imports 15bn litres of petrol despite Dangote refinery output

Marketers back NNPC

It was gathered that the NMDPRA and some marketers are planning to join the suit.

Speaking, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, stated that while every corporate organisation has the constitutional right to seek legal redress, the downstream petroleum sector must continue to encourage healthy competition, market stability, and energy security in the overall interest of Nigerians.

According to him, competition remains a critical pillar “for ensuring product availability, price moderation, efficiency, and sustainability within the petroleum distribution value chain”.

He emphasised that Nigeria’s energy market must not be allowed to tilt towards monopoly, regardless of the scale of investment or refining capacity of any single operator.

The PETROAN boss reiterated that Nigeria’s downstream petroleum sector must remain open, competitive, and balanced in order to “prevent supply shocks and protect consumers from artificial scarcity or price exploitation”.

Gillis-Harry acknowledged the significant investment made by the Dangote refinery and commended its contribution to local refining capacity, job creation, and reduction in fuel import dependence.

However, he stressed that a liberalised downstream market remains essential, where multiple operators can function fairly under the regulatory supervision of the Federal Government. He said one of the benefits of healthy competition in the downstream petroleum sector is the “reduction in fuel prices through competitive pricing”.

He outlined the disadvantages of monopoly in the sector, including arbitrary and exploitative pricing, limited choices for consumers, and reduced efficiency due to a lack of competition.

Gillis-Harry, therefore, reaffirms that the issuance of import licences is not only lawful but also a regulatory necessity provided by law to prevent scarcity and ensure continuous fuel availability across Nigeria.

Refiners oppose imports

The Crude Oil Refineries Association of Nigeria had also challenged fuel importers and clashed with marketers over the continued importation of refined petroleum products.

The CORAN Publicity Secretary, Eche Idoko, recently told our correspondent that commitment to the sector should be measured by capital invested and long-term risk exposure, not trading activity.

“Who has truly demonstrated faith in Nigeria’s downstream sector—local refinery companies or petroleum importers? The answer is not ideological. It is grounded in evidence, capital behaviour, and long-term commitment,” CORAN stated.

The association said local refinery companies had demonstrated belief in Nigeria by committing capital to fixed industrial assets located within the country. “Local refinery companies—spanning large-scale, mid-scale, and modular refineries—have demonstrated belief in Nigeria’s downstream sector by committing capital to fixed industrial assets located within the country,” it said.

CORAN described refining as one of the most capital-intensive and risk-exposed segments of the petroleum value chain, saying investors must contend with construction and commissioning risk, crude oil supply uncertainty, foreign exchange volatility, power, logistics, and evacuation constraints, and regulatory and policy inconsistency.

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NAFDAC destroys N8bn products, targets sachet alcohol in N’Central

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The National Agency for Food and Drug Administration and Control (NAFDAC) has confiscated and destroyed unwholesome, banned, fake and adulterated products worth more than N8 billion in the North-Central states.

Speaking during the destruction ceremony on Thursday in Lafia, the Nasarawa State capital, the Director-General of NAFDAC, Prof. Mojisola Adeyeye, said the products were seized from manufacturing outfits, sales outlets, markets and motor parks across the zone.

The DG, who was represented by a Deputy Director of NAFDAC in the zone, Joseph Edor, said most of the confiscated products were banned alcoholic beverages in small volumes of less than 200 ml (20 cl).

According to her, NAFDAC was established by Decree No. 19 of 1993, as amended, with the mandate to protect and promote public health by ensuring that only quality, efficacious and regulated products are manufactured, imported, distributed and sold in Nigeria.

She explained that the agency banned alcoholic beverages in sachets and glass bottles of less than 200ml due to their availability, affordability and portability, which have made them easily abused by youths and underage schoolchildren.

“Research has shown that early exposure to alcohol affects the brain and other vital organs such as the liver and kidneys.

“It stymies the brain, resulting in mental retardation, brain damage, poor performance of pupils in school, low productivity and several types of illnesses,” she said.

The DG said the ban and subsequent raids were based on these abuses, addiction and adverse health effects, while other seized items included expired, fake and unwholesome food, drugs and cosmetics.

“It is in the course of carrying out these activities that this heap of unwholesome, banned, fake and adulterated products worth about eight billion naira was confiscated from manufacturing outfits, sales outlets, markets and motor parks.

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“The bulk of the products in that pile are predominantly banned alcoholic beverages in low volumes of less than 200ml (20cl),” she emphasised.

The Director-General further commended other law enforcement agencies, sister agencies and stakeholders for their continuous collaboration, especially in intelligence sharing and security cover during operations.

Also speaking at the event, the Nasarawa State Coordinator of NAFDAC, Dr Gyani Stephen, explained that the exercise was not targeted at hurting people but was intended to save lives.

He advised those in the habit of selling fake and banned products to desist or be ready to face the full wrath of the law, warning that the agency would come after them if they did not change their ways.

In his goodwill message, the Nasarawa State Commander of the National Drug Law Enforcement Agency, Daniel Saidu, represented by Yakubu Awoh, commended NAFDAC for saving lives through the regular seizure and destruction of expired and fake drugs.

He explained that if these dangerous products were allowed into the markets, they could have destroyed millions of lives and affected the mental health of many others.

Source: punchng.com

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Seven modular refineries to begin operations in 2027, read details

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Nigeria’s modular refining sector is expected to expand next year, with seven new refineries projected to commence operations with a combined capacity of 83,000 barrels per day, according to Argus Media’s George Maher-Bonnett.

Maher-Bonnett disclosed this in Lagos on Wednesday during a presentation at the OTL Africa Downstream conference, where he highlighted the changing dynamics of Nigeria’s petroleum products market amid rising local refining capacity and declining fuel demand.

In his presentation, titled ‘African Energy Outlook’, Maher-Bonnett said four modular refineries operated in Nigeria in September, with a combined capacity of 32,000 barrels per day.

“Four modular refineries operating in September, total 32,000 b/d capacity,” he said.

He added, “Seven new modular refineries to start next year“ with a total of 83,000 barrels per capacity.

The projected additions would represent more than two and a half times the combined capacity of the four modular refineries operating in September, potentially increasing the contribution of smaller refining facilities to Nigeria’s domestic petroleum products supply.

However, the presentation did not identify the seven proposed refineries, their owners or locations, or provide individual capacity figures and commissioning schedules.

Maher-Bonnett also highlighted the growing role of the Dangote Petroleum Refinery in improving Nigeria’s self-sufficiency in petroleum products, despite a decline in fuel demand during the year.

“Nigerian fuels demand is down this year,” the presentation stated, attributing the development to “higher flat prices.”

He added self-sufficiency is improving with Dangote ramp-up, projecting that modular refineries would play a growing role.

The presentation linked the decline in demand to higher prices and noted that the only government intervention during the period covered was an NNPC price reduction.

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“No government interventions, besides NNPC price cut this month,” it stated.

The expected expansion of modular refining capacity comes as Nigeria’s petroleum products market adjusts to increased domestic production and changing international trade flows.

Maher-Bonnett said the Dangote refinery is operating at a high rate, with steady petrol output, reducing the attractiveness of importing some petroleum products from Europe into West Africa.

“Dangote’s 700,000 bpd Lekki refinery is running hard, gasoline output is steady,” the presentation stated.

It also highlighted Ghana’s growing refining capacity, noting that the 45,000-barrel-per-day Tema refinery is ramping up production and improving the country’s self-sufficiency.

According to the presentation, the economics of shipping petroleum products from Europe to West Africa and from Europe to the United States has weakened, with freight costs further affecting the competitiveness of the routes.

Source: punchng.com

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Falana tasks Senate on recovery of $123bn, N66bn oil funds, read details

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Human rights lawyer, Femi Falana, has asked the National Assembly to compel the recovery of $123.17bn in alleged outstanding oil royalties, taxes and dividends, alongside N66.4bn, from the Nigerian National Petroleum Company Limited and other oil and gas companies.

In a letter dated 28 October, 2026, and titled ‘Request to Recover Dividends, Taxes and Royalties Worth $123.17bn and N66.4bn from NNPC and Other Companies and Remit Same to the Federation Account’, Falana urged the National Assembly to ensure that the alleged outstanding revenues were recovered and remitted to the federation account.

He warned that he would institute legal proceedings at the Federal High Court if the authorities failed to initiate measures to recover the funds within 14 days of receiving the letter.

In an acknowledged copy of the letter made available to The PUNCH on Thursday, the senior advocate said the outstanding revenues covered several categories, including $62bn in unpaid oil royalties, $23.1bn in alleged unremitted dividends from Nigeria LNG Limited, $6.071bn in outstanding industry revenues, and claims relating to stolen crude oil and refinery rehabilitation contracts.

The letter also cited a Supreme Court consent judgment delivered on 20 October, 2018, which it said directed the Federal Government to collect outstanding royalties accrued over 18 years under the Deep Offshore and Inland Basin Production Sharing Contracts Act.

According to Falana, the governments of Akwa Ibom, Bayelsa and Rivers states had approached the Supreme Court to compel the Federal Government to enforce the law, which provided for an upward review of royalties when international crude oil prices exceeded $20 per barrel.

He said a committee constituted by the Office of the Attorney-General of the Federation subsequently determined that $62bn in royalties had not been collected from international oil companies.

Falana added that Akwa Ibom and Rivers states later obtained a Federal High Court judgment for a combined $3.3bn, while Bayelsa State secured a separate judgment for $951m over their alleged entitlements from the outstanding royalties.

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He said the Federal Government had yet to comply with the judgments.

The lawyer also called for the recovery of $29bn linked to alleged crude oil theft and undeclared exports, citing investigations by the Nigerian Maritime Administration and Safety Agency and the House of Representatives.

He said lawyers engaged by NIMASA discovered that about 60.2 million barrels of crude oil, valued at $12.7bn, allegedly stolen from Nigeria, were discharged at the Port of Philadelphia in the United States between 2011 and 2014.

According to the letter, the lawyers submitted their findings to the Office of the Attorney-General after which they filed nine civil cases at the Federal High Court in Abuja and Lagos to recover the value of the alleged stolen crude oil and liquefied gas.

Falana further cited a 2016 House of Representatives ad hoc committee investigation, which he said found that $17bn worth of crude oil and liquefied natural gas had been exported from Nigeria without proper records.

He said the committee found that the crude oil was discharged at the ports of Houston and Lake Charles in the United States.

He urged the National Assembly to direct the Economic and Financial Crimes Commission to pursue the recovery of the funds from the companies allegedly involved.

On the NLNG dividends, Falana alleged that NNPC had failed to remit $23.1bn due to the Federal Government from its 49 per cent shareholding in NLNG.

He explained that NLNG, established in 1989, had paid more than $47bn in dividends to its shareholders over 26 years, with the Federal Government’s share paid through NNPC.

The other shareholders listed in the letter are Shell, with 25.6 per cent; TotalEnergies, 15 per cent; and Eni International, 10.4 per cent.

Falana argued that the dividends received by NNPC on behalf of the Federal Government should have been transferred to the Federation Account in accordance with Section 162 of the 1999 Constitution, as amended.

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He added that resolutions of the Senate and the House of Representatives calling for the remittance of the funds had allegedly been ignored.

The senior advocate also called for the recovery of $6.071bn and N66.4bn in outstanding revenues owed by oil and gas companies, citing the Nigerian Extractive Industries Transparency Initiative’s 2022/2023 Independent Oil and Gas Industry Report.

According to him, NEITI disclosed on 27 September, 2024, that the outstanding collectible revenues due to the Federal Government as of June 2024 stood at the stated amounts.

He said copies of the report were forwarded to both chambers of the National Assembly in November 2024 in line with the provisions of the NEITI Act.

Falana urged lawmakers to support NEITI in recovering the outstanding revenues without further delay.

The letter also questioned the outcome of the rehabilitation of the Port Harcourt, Warri and Kaduna refineries, for which the Federal Executive Council approved contracts totalling about $2.98bn in 2021.

It said the government approved $1.5bn for the rehabilitation of the Port Harcourt refineries in April 2021 and another $1.48bn for the Warri and Kaduna refineries in August of the same year.

Falana argued that NNPC announced in December 2024 that the Port Harcourt and Warri refineries had been substantially completed, while work on the Kaduna refinery was almost finished.

However, he cited NNPC’s subsequent announcement that the Warri refinery ceased operations on 25 January, 2025, following safety issues involving its crude distillation unit main heater. He also referred to the shutdown of the Port Harcourt refineries for planned maintenance in May 2025.

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He argued that the contractors had breached the terms of the rehabilitation agreements and called for the recovery of the contract sums.

“In view of the foregoing, we are compelled to request the Office of the Attorney-General to recover the total sum of $123.17bn and N66.4bn owed the Government of the Federation by the Nigerian National Petroleum Corporation Limited, and some oil and gas companies operating in Nigeria,” the letter stated.

Falana said recovering the funds would reduce the Federal Government’s dependence on external borrowing and provide additional revenue for the federation and the states.

He warned that failure to begin recovery measures within 14 days would prompt legal action.

“If you fail to initiate legal measures for the recovery of the aforesaid huge funds belonging to the Government of the Federation within 14 days of the receipt of this letter, we shall not hesitate to file the necessary processes in the Federal High Court with a view to compelling you to discharge the duty of your office,” he wrote.

Falana also defended his firm’s standing to pursue the matter, citing its involvement in drafting and submitting a bill to amend the Deep Offshore and Inland Basin Production Sharing Contracts Act in 2017.

He noted that the bill was adopted and sponsored by a senator, subsequently passing first reading in the Senate before the dissolution of the Eighth National Assembly. According to him, the Ninth National Assembly subsequently adopted and passed the amendment.

He recalled that the then President of the Senate, Ahmad Lawan, had said the amendment would increase the country’s revenue by at least $1.5bn annually.

Source: punchng.com

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