Dangote Refinery withdraws suit against issuance of petrol import licences amid new import tariff
The Federal High Court in Abuja on Wednesday dismissed the N100 billion suit filed by Dangote Petroleum Refinery to challenge the issuance of licences for importation of petroleum products into the country.
Dangote Refinery filed the suit in September last year against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and others.
Other defendants are AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited and Matrix Petroleum Services Limited.
In the suit, the refinery sought an order voiding the import licences issued to the NNPC and the private companies.
But the judge, Mohammed Umar, dismissed the plaintiffs and withdrew the suit on Wednesday.
The plaintiff, through its lawyer, C. O. Adegbe, informed the court that it filed the notice for the discontinuation of the suit on 28 July.
She told the court that the plaintiff had agreed with the defendants that the matter should be struck out.
Although the refinery had filed the notice to discontinue the suit in July, Wednesday’s where the company’s firm moved to act on it, came about two weeks after President Bola Tinubu approved a 15 per cent import duty on petrol and diesel.
The policy is a controversial move, which the government said was aimed at supporting local refining and boosting energy security, but which critics say could lead to an increase in fuel price. Many perceive the policy as an anti-competition measure to confer advantage on the refinery’s business.
The president’s approval was contained in a letter with reference no: PRES8197/HAGF/100/71/FIRS/40/88-2/NMDPRA/2, dated 21 October. The letter was addressed to the Attorney General of the Federation and Minister of Justice, Federal Inland Revenue Service (FIRS) and the NMDPRA.
Essentially, the tariff would ensure that imported petrol is not cheaper than that of the Dangote refinery, which produces virtually all of Nigeria’s locally produced petrol. The implementation of the tariff will begin in about a month, following the request by the chairman of the revenue agency, FIRS, Zacch Adedeji, whose memo triggered the presidential approval.
The tariff allows for a 30-day window and adds to the controversy around petrol import and production in Africa’s largest oil producer.
The letter, titled ‘Re: introduction of a market-responsive import tariff framework on Premium Motor Spirit (PMS) & Diesel,’ was signed by Damilotun Aderemi, the Private Secretary of the President.
Just days after the policy became public, the refinery, the largest oil refinery in the West African country, announced that it produced enough petrol and diesel for local consumption.
Hearing
At the resumed hearing on Wednesday, the refinery’s lawyer, Ms Adegbe, urged the court to terminate the case on grounds of the refinery’s decision to withdraw it.
NMDPRA’s lawyer, I. B. Ahmad, did not oppose the application. However, after acknowledging receipt of the notice of discontinuance, he urged the court not to strike the case out but to dismiss it entirely.
Also, Chris Ekemezie, who appeared for the third, fourth and seventh defendants (AYM Shafa Limited, A. A. Rano Limited and Matrix Petroleum Services Limited), urged the court to dismiss the suit.
Mr Ekemezie cited Supreme Court and Court of Appeal precedents and said that where such an application is made, the proper step is dismissal not a mere striking out.
“In law, when a case is struck out, it can be refiled before the same court. But when it is dismissed, it cannot be refiled unless overturned on appeal,” he said.
Mr Ekemezie further noted that the parties had already filed and adopted their final written addresses ahead of judgement, only for the plaintiff to withdraw its case at the stage of proceedings.
He alleged that “it seems what the plaintiff plans to do is to go and panel beat its case and come back.”
“So we urge my lord to dismiss it,” he added.
Similarly, the lawyer to the fifth and sixth defendants (T. Time Petroleum Limited and 2015 Petroleum Limited), Mofesomo Tayo-Oyetibo, a Senior Advocate of Nigeria (SAN), did not oppose the withdrawal and aligned himself with the submissions of other defence lawyers.
But Ms Adegbe disagreed with the defence lawyers’ request for dismissal. She reiterated that her client had agreed with the defendants that the matter should be struck out.
After listening to their arguments, the judge dismissed the suit.
“The case on record is that parties have joined issues and what remains is for parties to adopt their processes. It is at this stage that the plaintiff came for a withdrawal.” The judge said adding that the matter is deemed for dismissal and cost,” But since “cost is not asked for, the matter is hereby dismissed,” the judge ruled.
Dismissed suit
Dangote Refinery filed the suit seeking N100 billion against the NMDPRA for issuing fuel import licences to NNPC Limited and oil marketers despite that no shortfall in petroleum products supply was declared in the country.
The marketers are NNPCL, Matrix Petroleum Services Limited, AYM Shafa, A. A. Rano, T. Time Petroleum and 2015 Petroleum.
At one sitting, Dangote’s lawyer, Ogwu Onoja, said the agency violated sections 317 (8) and (9) of the Petroleum Industry Act by failing to prioritise local refineries.
In a counter-affidavit dated 5 November 2024 filed by Ahmed Raji, the marketers urged the court to dismiss the suit. They argued that competition is essential and that Dangote is seeking a monopoly.
NMDPRA, in an affidavit by Idris Musa, said Dangote Refinery cannot meet national demand and that the licences were issued to bridge supply gaps.
On 9 December 2024, the plaintiff sought a motion to correct the name of the second defendant from “Nigeria National Petroleum Corporation Limited” to “Nigerian National Petroleum Company Limited.”
But NNPC Limited raised a preliminary objection, arguing that the suit was incompetent and should be struck out for misidentification, among other grounds.
On 18 March, a judge, Inyang Ekwo, who first handled the case, dismissed the defendants’ objection. In July,
Judge Muhammad Umar had set 29 September for hearing the refinery filed its notice of discontinuance on 29 July.
About Dangote Refinery
Dangote refinery commenced diesel and aviation fuel production in January 2024. Later in September, it announced that it had begun producing petrol.
The refinery disclosed in August that it was on course to become the world’s largest refinery, with plans to scale up capacity to 1.4 million barrels per day (bpd) from the current 650,000 bpd.
The move would take the daily processing capacity of the plant, currently the world’s biggest single-train refinery, past that of India’s Jamnagar Refinery, whose capacity stands at 1.2 million bpd.
The company said the expansion phase will create 65,000 jobs and open tremendous opportunities for local industries.