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.
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.
“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.
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.
punch.ng
FOLLOW US ON:
