Dangote Seeks Court Order To Void Petroleum Product Import Licenses, Claims Violation Of PIA

The Dangote Petroleum Refinery and Petrochemicals FZE has gone before the Federal High Court in Abuja for among others, an order voiding all licenses recently issued for the importation of petroleum products into the country.

Dangote Petroleum, in a suit marked: FHC/ABJ/CS/1324/2024 also wants the court to award damages at N100billion against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for allegedly proceeding to issue import licenses to the Nigeria National Petroleum Corporation Limited (NNPCL), Matrix Petroleum Services Limited (Matrix) and others for for the purpose of importing petroleum products such as Automotive Gas Oil (AGO) and Jet Fuel (aviation turbine fuel) into the country despite its production of AGO wnd Jet-A1 that exceeds the current daily consumption of petroleum products in Nigeria.

Listed, along with the NMDPRA, as defendants in the suit are: The NNPCL, A.Y.M. Shafa Holdings Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited.

In the suit filed for Dangote by a group of lawyers, led by Ogwu Onoja (SAN), the plaintiff is contending among others , that the licenses issued to NNPCL and others violated the Petroleum Industry Act (PIA).

The plaintiff stated that it is greatly distressed, adding that its investments risk being jeopardised unless the court intervenes and declare that NMDPRA is in violation of its statutory responsibilities under the PIA for not encouraging local refineries, but issuing licenses for importation of petroleum products

Dangote, in a supporting affidavit, stated that such licenses should only be issued in circumstances where there is a petroleum product shortfall.

The firm’s Group General Manager of Government and Strategic Relations, Ahmed Hashem stated, in the supporting affidavit, that the import licenses granted to other companies by NMDPRA for the importation of AGO and Jet-A1 are crippling the plaintiff’s business, to which it has committed substantial financial resources in billions of US dollars.

Hashem stated that the plaintiff’s products are largely left unpatronized due to the alleged actions of NMDPRA.

He stated that NMDPRA has threatened to impose and demand a 0.5% levy on the plaintiff on wholesales and off-takers, as well as another 0.5% levy on wholesales to the Midstream and Downstream Gas Infrastructure Fund (MDGIF) via a letter dated June 10, 2024, contrary to statutory provisions that limit the implementation of levies on transactions within Free Zones.

Hashem added that the foundational purpose of establishing Free Zones is to foster competition, attract foreign investment, and create tax havens.

He stated that there is an alleged grand conspiracy and concerted effort by International Oil Companies and interests, in conjunction with the defendants, who are unhappy that Nigeria has an indigenous refinery ready to solve the lingering energy crisis and save the economy.

Hashem said: “The intervention of the Honourable Court has become necessary in order to stem the incessant violation of statutory provisions by the 1st Defendant in favor of other entities such as the 2nd to 7th defendants.”

Dangote wants the court to issue an order of injunction restraining the NMDPRA from further issuing and/or renewing import licenses to the the other defendants or other companies for the purpose of importing petroleum products.

In addition to a restraining order against the import licenses of the affected companies,

Other reliefs partly sought by the plaintiff are as follows:

It also wants the court to declare that NMDPRA is allegedly in violation of Sections 317(8) and (9) of the Petroleum Industry Act by issuing licenses for the importation of petroleum products.

Other reliefs being sought includes:

*A declaration that by the provisions of Section 8(1) of the Nigerian Export Processing Zone Act (NEPZA), Sections 23(h) and 55(1) of the Companies Income Tax Act (CIT Act), Paragraph 6 of the Second Schedule to the CIT Act, Regulation 54(2)(a)(i) of the Dangote Industries Free Zone Regulation 2020, and the Finance Act, the plaintiff, being an entity duly registered as a Free-Zone Enterprise, is exempted from all federal, state, and local government taxes, levies, and other rates.

*A declaration that it is against the NEPZA Act, CIT Act, Finance Act, and Dangote Industries Free Zone Regulation 2020, as well as legislative intent, for the 1st Defendant to impose or threaten to impose on the plaintiff an additional financial obligation of a 0.5% levy meant for off-takers of petroleum products directly and an additional 0.5% wholesale levy in favor of the Midstream Downstream Gas Infrastructure Fund (MDGIF).