Court filings have revealed a significant legal battle, with major implications for Nigeria’s petroleum sector, as Dangote Refinery attempts to monopolize the industry. A counter-affidavit submitted by Ali Abiodun, the acting managing director of AYM Shafa Limited, warns of the catastrophic consequences if the refinery’s request for exclusive importation rights is granted.
Dangote Refinery, valued at $20 billion, is suing the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to revoke importation licenses issued to key oil companies, including NNPC, A.A. Rano Limited, Matrix Petroleum Services Limited, and AYM Shafa. The lawsuit, filed in the Federal High Court in Abuja, claims these companies engage in anti-competitive practices.
In a 74-page document exclusively obtained by Politics Nigeria, Abiodun states that granting Dangote exclusive rights would severely harm Nigeria’s economy. “Vesting the plaintiff with monopoly power in Nigeria’s petroleum industry will stifle competition, worsen the economy, and create widespread hardship,” he asserts. Abiodun also highlights concerns that eliminating other importers would lead to severe petroleum shortages, exacerbating Nigeria’s already fragile economy.
Legal experts argue that granting Dangote’s request could violate Nigeria’s international obligations under the World Trade Organization (WTO) and other trade treaties. The case is set to be heard in January 2025.
Dangote Refinery Faces Criticism Over Unfair Practices
Abiodun also exposed what he described as unfair business practices at Dangote Refinery. He highlighted instances where buyers are forced to deposit more than 110% in Letters of Credit (LC), with prices communicated only after the product is loaded. “This oppressive practice harms businesses, particularly smaller ones, who cannot operate under such conditions,” Abiodun added.
Dangote Refinery Finally Reveals How Much It Sells Petrol Amid Dispute with Marketers
The AYM Shafa head also challenged Dangote’s claimed refining capacity. He questioned the refinery’s ability to produce 35 million liters of Automotive Gas Oil (AGO) and 9 million liters of Jet A-1 daily, demanding verifiable evidence. Despite this skepticism, AYM Shafa remains one of Dangote’s first customers, having loaded over 190 million liters since the refinery began operations in April 2024.
Concerns Over Nigeria’s Energy Security
The court documents also reference global trends in petroleum importation, citing examples from major oil-exporting nations. Despite possessing vast refining capacities, countries like the United States, Saudi Arabia, and the UAE continue to import refined petroleum products as part of their energy security strategies.
Abiodun emphasized that countries with substantial refining infrastructure still rely on imports to maintain energy security. “Saudi Arabia, with a refining capacity of 2.9 million barrels per day, still imports refined products for strategic reasons,” he noted.
A Call Against Monopolization in Critical Sectors
In his conclusion, Abiodun urged the court to consider the long-term impacts of creating a monopoly in Nigeria’s petroleum sector. “No nation has ever achieved sustainable development by fostering monopolies in vital sectors. Allowing Dangote Refinery to control Nigeria’s petroleum industry would undermine the nation’s energy security and economic stability.”
This legal clash marks a pivotal moment in Nigeria’s petroleum industry, with stakeholders and regulators alike keeping a close eye on the outcome. As the case progresses, it will shape the future dynamics of Nigeria’s energy sector and the broader economy.
Related Developments:
- Last month, Aliko Dangote, CEO of Dangote Refinery, claimed the refinery processes approximately 420,000 barrels of crude daily, with over 500 million liters of petroleum available for sale. However, these figures have been disputed by industry stakeholders, including oil marketers.
- Dangote Refinery’s pricing strategies continue to spark controversy, particularly as it seeks to assert dominance in the marketplace, despite challenges from competitors.
Ejes Gist News understands that this unfolding drama highlights the growing tension between Dangote Refinery’s expansion efforts and the need for fair competition in Nigeria’s petroleum sector.
