In Fuel Import Licence Dispute, NNPC Accuses Dangote Refinery of Seeking Monopoly

*Warns court action could destabilise supply, undermine energy security

Wale Igbintade

The Nigerian National Petroleum Company Limited (NNPC), in a statement of defence before a Federal High Court in Lagos, has accused the Dangote Petroleum Refinery of seeking to undermine competition in the downstream petroleum sector through its legal challenge to fuel import licences issued to rival marketers.
The state oil company, NNPC Limited, argued that granting the reliefs sought by Dangote Petroleum Refinery would expose Nigeria to fuel supply disruptions, price instability, and risks to national energy security.
NNPC maintained that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) acted within its statutory powers in issuing import licences.
It said the law permits licences for companies with local refining capacity or a proven record in petroleum trading, and that regulators retain discretion under Nigeria’s backward integration policy.
The company further argued that there was no legal requirement mandating a ban on imports except in cases of verified domestic shortfall.
It rejected Dangote Refinery’s interpretation of the Petroleum Industry Act, insisting that fuel imports remain a lawful mechanism for stabilising supply and pricing in the domestic market.
The dispute stems from a suit filed by Dangote Petroleum Refinery challenging the issuance and renewal of import licences granted to petroleum marketers and the NNPC.
The refinery is seeking an interim injunction restraining the Attorney-General of the Federation and relevant agencies from issuing or renewing licences for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Jet A1.
Dangote argued that continued issuance of import licences undermines local refining and violates Section 317(9) of the Petroleum Industry Act, which it interprets as restricting imports to situations where there is a proven supply shortfall.

The refinery, which has a capacity of about 650,000 barrels per day, maintains that Nigeria already has sufficient domestic refining output to meet national demand.

It cited regulatory data indicating that daily production of petrol and diesel exceeded consumption levels, arguing that imports are therefore unnecessary.

Dangote Refinery also told the court that it has the capacity to meet 100 per cent of Nigeria’s refined petroleum needs while generating export surplus.

It described the project as a major national investment expected to create a multi-billion-dollar market for Nigerian crude oil.

However, NNPC disputed claims that the refinery can independently guarantee national fuel supply, stating that Dangote has not provided credible or verifiable evidence to support its production capacity claims.

The NMDPRA also applied to join the case, expanding the dispute into a broader regulatory and policy conflict over fuel importation and market structure.

Dangote Refinery further alleged that government agencies, including the NMDPRA, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and NNPC, have created a hostile operating environment by continuing to issue import licences despite the absence of a supply shortfall.

It also accused NNPC of failing to supply sufficient crude oil for optimal operations, claiming it receives about five crude cargoes per month instead of the 13 required to run at full capacity, forcing it to source crude internationally at higher prices.

The NNPC denied any wrongdoing, insisting that crude allocation decisions are based on operational, commercial, security, and logistical considerations rather than any attempt to sabotage the refinery.

The dispute has taken on added significance ahead of Dangote Refinery’s planned September IPO, raising concerns among investors about regulatory stability and market predictability in Nigeria’s downstream oil sector.

NNPC warned that restricting import licences could destabilise fuel supply, increase price volatility, and threaten energy security in Africa’s largest oil market.

Dangote Refinery, however, argued that continued imports could undermine its operations and jeopardise Nigeria’s long-term goal of energy self-sufficiency.

The refinery is also seeking an interim injunction to restrain the issuance of new import licences pending determination of the substantive suit, arguing that it stands to suffer irreparable financial and operational losses.

The court is yet to fix a date for hearing the case.