LAGOS — A regulatory dispute between the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Dangote Petroleum Refinery over the handling and distribution of propane has escalated into a legal battle, with the regulator alleging product diversion and potential safety breaches, while the refinery accuses the authority of exceeding its powers.

The dispute centres on NMDPRA’s directive suspending propane loading and truck-out operations at the 650,000-barrel-per-day Dangote refinery, and comes amid a wider regulatory debate over product quality, LPG blending standards, supply-chain controls and the authority of the petroleum regulator over one of Africa’s largest refining complexes.

At the Federal High Court in Lagos on Wednesday, NMDPRA asked the court to discharge an interim order restraining the regulator and its officials from interfering with operations at the refinery.

According to The Punch Newspaper report,the regulator argued that the order was obtained through alleged misrepresentation and suppression of material facts and also challenged the jurisdiction of Justice Akintayo Aluko to grant the order.

Dangote Refinery, however, maintained that NMDPRA had acted improperly, arguing that the regulator’s own officials had inspected and certified the refinery’s propane before it was collected by independent off-takers.

The court ultimately extended the interim order, leaving the regulatory restrictions and the underlying allegations to be determined in the substantive proceedings.

NMDPRA raises propane safety concerns

NMDPRA, through its counsel, Matthew Burkaa, told the court that its decision to suspend propane loading and truck-out operations followed an investigation into the alleged diversion of propane-laden trucks to unidentified or unlicensed customers and the alleged use of the product in unauthorised LPG blending operations.

According to the regulator, laboratory tests on LPG samples obtained from three plants — Selai, Tewa and Ameego Pago — allegedly showed propane content exceeding 50 per cent.

NMDPRA said industry specifications require propane to account for no more than 20 per cent of an LPG blend, with butane making up approximately 80 per cent.

The regulator said representatives of the three plants were invited to explain the test results and subsequently identified Sublime Oil and Gas Limited, an off-taker from Dangote Refinery, as their source of propane.

This, it said, triggered a broader reconciliation and material-balance exercise involving propane-producing facilities and LPG-blending plants.

NMDPRA further alleged that its officials were denied access when they attempted to inspect propane-loading operations and relevant records at Dangote Refinery on August 24.

The regulator subsequently issued a notice of potential non-compliance and directed the refinery to suspend propane loading and truck-out operations pending completion of its investigation and the introduction of additional safety measures.

Regulator alleges 19 missing propane trucks

A key element of NMDPRA’s case concerns discrepancies it said it found in truck-out records.

According to the regulator, its review of the refinery’s manifests showed that Sublime Oil and Gas lifted 25 trucks of propane on August 20 and 22 for delivery to Navgas/Agasco.

NMDPRA said Navgas confirmed receiving only six of the consignments, leaving 19 trucks unaccounted for based on the records presented to the regulator.

It also alleged that records from Delta State indicated that another off-taker loaded 52 trucks between May and August 2026 for delivery to Navgas, but that Navgas reportedly confirmed receiving none of the consignments.

The regulator argued that the alleged movement of propane to unauthorised or unlicensed customers posed significant public-health and industrial-safety concerns, particularly if the product was subsequently used in LPG blending outside approved specifications.

NMDPRA also told the court that propane produced by Dangote Refinery and other gas-processing facilities could have vapour pressure of around 13 bar, compared with a maximum pressure of about seven bar for the standard propane-butane LPG mixture.

It argued that the higher-pressure product could create safety risks at LPG facilities that were not designed or certified to handle such pressure.

Dangote rejects regulator’s allegations

Dangote Group rejected the regulator’s claims, arguing that NMDPRA officials were stationed at the refinery, inspected the propane and certified it before the product left the facility.

The group’s spokesman, Anthony Chiejina, said the regulator could not reasonably hold the refinery responsible for the subsequent movement or alleged alteration of a product after it had been purchased and transported by an independent off-taker.

“We have NMDPRA staff there in the refinery. They inspected and certified the product as okay,” Chiejina said.

He questioned how Dangote could be held responsible for a truck that had left the refinery after its product was inspected and certified.

Chiejina also accused the regulator of abusing its authority by attempting to interfere with the refinery’s operations.

“You went to the plant to seal it and later left the plant. For me, that is an absolute abuse of power by NMDPRA,” he said.

He challenged the regulator to produce the records supporting its allegations and distinguish between the product supplied by Dangote and any subsequent blending or alteration allegedly carried out elsewhere.

The Dangote spokesman also argued that the refinery should not be responsible for the destination of products after independent customers had taken possession of them.

Court extends interim protection

At Wednesday’s proceedings, counsel to Dangote Refinery, Wale Akoni, SAN, drew the court’s attention to NMDPRA’s counter-affidavit filed in response to the refinery’s motion on notice.

Akoni sought a short adjournment to enable the refinery’s legal team to respond, explaining that he had only been served with the regulator’s counter-affidavit in court.

Burkaa did not oppose the request but stressed the urgency of the case, citing the safety concerns raised by the regulator.

Justice Aluko said he could not fix a new date because he was sitting as a vacation judge and the court’s annual vacation was due to end on Friday.

“My jurisdiction ends on Friday as far as the vacation matter is concerned,” the judge said, directing that the case file be returned to the registry for assignment to the appropriate regular court.

The judge nevertheless extended the interim order issued on August 31 restraining NMDPRA, its officers, agents and representatives from entering, sealing, shutting down, restricting access to, obstructing, suspending, disrupting, inspecting, supervising or sanctioning the refinery’s operations pending determination of the substantive application.

“I find it proper to extend the interim order made on the 31st day of August 2026. It shall continue to subsist and shall be in force till the hearing and determination of the motion on notice, or until the court gives further directive,” Justice Aluko ruled.

He subsequently directed that the case file be remitted to the registry for assignment to a regular court by the administrative judge.

Wider implications for Nigeria’s downstream sector

The legal dispute carries implications beyond the immediate disagreement over propane.

Dangote Refinery has become a strategically important component of Nigeria’s drive to increase domestic refining, reduce dependence on imported petroleum products and deepen local control of the downstream value chain.

The refinery’s expanding role in supplying fuels and petrochemical products has also increased the significance of its relationship with petroleum regulators, making disputes over product specifications, safety standards, inspections and distribution controls particularly consequential for investors and market participants.

For NMDPRA, the case raises questions about the regulator’s ability to enforce safety and product-quality standards across an increasingly complex domestic refining and LPG supply chain.

For Dangote Refinery, the central issue is whether regulatory intervention can extend to products after they have passed inspection and certification at the refinery and have been purchased and transported by independent off-takers.

The substantive court proceedings are therefore expected to clarify the scope of the regulator’s powers, the evidentiary basis for the alleged propane diversion and quality breaches, and the responsibilities of refiners and off-takers for the handling of petroleum products after dispatch.

For now, the court’s interim order remains in force, meaning NMDPRA is restrained from taking the specific forms of operational interference covered by the order while the substantive dispute proceeds.

The court has not yet determined the truth of the competing allegations by NMDPRA and Dangote Refinery