LAGOS, Nigeria — Dangote Group has announced that it will withdraw its ₦100 billion lawsuit against the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, over the issuance of import licenses to several companies, including the Nigerian National Petroleum Company Limited, NNPCL.
The announcement comes as the parties involved in the legal dispute have entered into conciliatory talks, according to a statement released late Monday, October 21, 2024 by the Dangote Group.
The lawsuit, which was filed at the Federal High Court in Abuja on September 6, 2024, challenged the NMDPRA’s decision to grant petroleum import licenses to NNPCL, Matrix Petroleum Services Limited, AA Rano Limited, and four other companies.
The Dangote Group argued that these licenses were issued despite sufficient local production of petroleum products at the recently operational Dangote Refinery.
In the statement, the Dangote Group’s spokesman, Anthony Chiejina, described the lawsuit as “an old issue” and confirmed that the company no longer intends to proceed with legal action.
“We have agreed to put a halt to the proceedings,” Chiejina stated.
“It is important to stress that no orders have been made and there are no adverse effects on any party. Once the matter comes up in January 2025, we would be in a position to formally withdraw the matter in court.”
The Dangote Group’s legal action initially sought to challenge the NMDPRA’s compliance with sections 317(8) and (9) of the Petroleum Industry Act (PIA).
The refinery argued that import licenses should only be issued when there is a verified shortfall in local production, a situation the company contended was not the case.
Dangote Refinery, which began supplying diesel, aviation fuel, and recently petrol, claimed that the issuance of these licenses had negatively impacted its business operations by diverting potential customers.
The lawsuit sought an injunction to prevent the NMDPRA from issuing or renewing any further import licenses, which the Dangote Group said undermined its massive investment in local petroleum production.
However, with talks between the parties progressing, the matter is now expected to be formally withdrawn in January 2025.
Dangote Refinery’s Impact on Nigeria’s Energy Sector
Aliko Dangote, Africa’s wealthiest industrialist, began operations at the $20 billion Dangote Refinery in December 2023, located in Lagos’ Ibeju-Lekki area.
Initially projected to process 350,000 barrels per day, the refinery aims to reach full capacity of 650,000 barrels per day by the end of 2024, marking a significant shift in Nigeria’s domestic fuel production.
Nigeria, Africa’s most populous country, has struggled with energy challenges for years.
Despite being a leading oil producer, the country’s state-owned refineries have remained non-operational, leaving the nation heavily dependent on imported refined petroleum products.
The NNPCL remains the country’s largest importer, leading to periodic fuel shortages and long queues at filling stations.
Since the removal of fuel subsidies in May 2023, petrol prices have tripled, rising from ₦200 per litre to over ₦1,000 per litre.
The sharp increase in fuel prices has exacerbated the economic difficulties faced by Nigerians, who rely heavily on petrol for transportation and powering generators due to the country’s unreliable electricity supply.
As Nigeria grapples with its energy crisis, the Dangote Refinery’s efforts to meet local demand for petroleum products are seen as a crucial step towards reducing the nation’s reliance on imports and stabilizing fuel prices in the long term.
The next court hearing, scheduled for January 2025, is expected to see the formal withdrawal of the suit, allowing Dangote and the NMDPRA to resolve their differences outside the courtroom.
