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Thursday, November 7, 2024

Marketers drag Dangote Refinery to court, seek continued petrol imports

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In a new legal battle, three oil marketing companies (AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited) have filed a response at the Federal High Court in Abuja, opposing a suit from Dangote Petroleum Refinery and Petrochemicals.

The marketers are pushing for a dismissal of Dangote’s suit, arguing that the refinery’s demand to halt import licenses for petroleum products could harm the nation’s oil sector.

In their joint counter-affidavit, the marketers expressed concern that Dangote’s bid to monopolize the petroleum industry would destabilize the sector.

The initial suit, filed by Dangote Refinery in September, named several entities, including Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Nigeria National Petroleum Corporation Limited, alleging that the issuance of import licenses for petroleum products violates the Petroleum Industry Act (PIA).

Dangote Refinery argued that import licenses should only be granted when there is a shortfall of petroleum products and claimed NMDPRA failed to support local refineries, which is against its mandate.

However, the marketers responded that Dangote’s current production does not meet Nigeria’s daily petroleum demand. They asserted that they are qualified to import petroleum, as they fulfill legal criteria under Section 317(9) of the PIA.

The marketers warned that granting Dangote exclusive control over Nigeria’s petroleum supply would stifle competition, increase fuel prices, and harm the economy.

They argued that if Nigeria depends solely on Dangote for petroleum, any production disruption could lead to an energy crisis, with prices and availability becoming unpredictable.

A decision from Justice Inyang Ekwo on the matter is expected on January 20, 2025.

Meanwhile, Dangote Refinery’s export activities have gained international attention.

According to Bloomberg, 75% of the refinery’s products are being purchased by major foreign firms—Vitol Group, Trafigura Group, and BP Plc. Since beginning operations earlier this year, Dangote has processed 650,000 barrels per day, producing diesel, aviation fuel, and petrol.

The refinery’s production is helping reshape fuel trading dynamics in Africa and Europe.

While most shipments are exported, some products are supplied to the local market, where the refinery continues to increase production capacity.

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