Energy Monopoly Concerns Rise As Oil Marketers Battle Dangote In Court

ABUJA—Three major oil marketing companies in Nigeria requested that the Federal High Court in Abuja intervene to prevent Dangote Petroleum Refinery and Petrochemicals FZE from establishing a monopoly over the country’s energy sector.The companies—AYM Shafa Limited, A. A. Rano Limited,…CONTINUE READING…

and Matrix Petroleum Services Limited—argued that allowing Dangote Refinery to dominate the oil sector could have serious consequences for the nation.

Efforts to contact Mr. Anthony Chiejina, Group Head of Communications at Dangote Group, for comments were unsuccessful.

The marketers made their position known in a response filed against a suit by Dangote’s firm, which seeks to invalidate their licenses to import refined petroleum products. Cited as defendants, along with the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigeria National Petroleum Corporation Limited (NNPC), the marketers contend that Dangote’s bid could lead to higher consumer costs and reduced competition.

Dangote Refinery’s lawsuit challenges NMDPRA’s issuance of import licenses, claiming that these were unnecessary given its own refinery’s production. The plaintiff alleges that NMDPRA breached the Petroleum Industry Act (PIA) by permitting imports despite the refinery meeting the country’s fuel needs.

In addition to a ₦100 billion damages claim against NMDPRA, Dangote’s suit seeks to stop the issuance of new import licenses and requests that all storage facilities used by competitors for imported petroleum be shut down.

The defendant marketers, however, argued that Dangote Refinery does not produce enough fuel to meet daily demand in Nigeria. They cautioned that allowing Dangote to monopolize the sector could stifle competition, worsen economic challenges, and create hardship for consumers by raising fuel prices without alternative options.

They further warned that relying solely on Dangote Refinery for fuel supply would leave Nigeria vulnerable in the event of production disruptions, as the nation lacks adequate reserves for emergencies.

The marketers affirmed that they fully met the legal criteria for their import licenses, which they say align with the Petroleum Industry Act, the Federal Competition and Consumer Protection Act, and other laws.

Justice Inyang Ekwo has adjourned the case until January 20, 2025, to allow parties to explore an out-of-court settlement, with Dangote indicating willingness to withdraw the suit.