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Nigeria’s state oil firm NNPC has accused Dangote Petroleum Refinery of seeking to restrict competition and expose the country’s fuel market to monopoly control by challenging import licences issued to rival marketers, according to court documents seen by Reuters.
In a proposed defence filed at the Federal High Court in Lagos, NNPC said granting Dangote’s request to void or restrict import permits would expose Africa’s largest oil producer to supply disruptions, price instability and risks to national energy security.
According to Reuters,the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has applied to join the case, widening a legal battle over import policy and Dangote refinery’s market position.
The dispute comes months before Dangote’s planned September IPO of its refinery business, adding uncertainty over market rules, import competition and the revenue outlook investors may assign to the 650,000-barrel-per-day plant.
Dangote Petroleum Refinery filed the lawsuit in April against Nigeria’s attorney general, challenging fuel import licences issued or renewed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, or NMDPRA, to marketers and NNPC. Dangote argues the licences undermine local refining and violate provisions of Nigeria’s Petroleum Industry Act.
NNPC rejected that argument, saying the law allows import licences to companies with local refining licences or proven records in international crude and petroleum-product trading. It said regulators had discretion to manage imports under Nigeria’s backward-integration policy and that there was no mandatory ban on imports except in cases of domestic shortfall.
NNPC also said Dangote had not provided “credible, independent or verifiable evidence” that the refinery could meet Nigeria’s total fuel demand or guarantee uninterrupted nationwide supply, the court documents show.
Dangote declined to comment while the case is ongoing.
NNPC denied allegations that it had sabotaged Dangote’s refinery or deliberately withheld crude, saying crude allocations depended on operational, commercial, security and logistical factors.