NNPC, Dangote Refinery Clash Over Fuel Import Licences

The Nigerian National Petroleum Company Limited (NNPC) has accused Dangote Petroleum Refinery of attempting to monopolise Nigeria’s downstream petroleum sector through its legal challenge against fuel import licences issued to rival marketers.

In a statement of defence filed before the Federal High Court in Lagos, NNPC argued that granting the requests sought by Dangote Refinery could expose the country to fuel shortages, price instability, and wider risks to national energy security.

The state-owned oil company maintained that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) acted within the law in issuing import licences to marketers and petroleum traders.

According to NNPC, existing regulations permit the issuance of import licences to companies with local refining capacity or established records in petroleum trading, while regulators retain discretionary powers under Nigeria’s backward integration policy.

The company further argued that there is no legal provision mandating a total ban on fuel imports except in cases where domestic supply shortfalls are officially confirmed.

NNPC rejected Dangote Refinery’s interpretation of the Petroleum Industry Act (PIA), insisting that fuel importation remains a lawful mechanism for maintaining market stability and preventing supply disruptions.

The dispute arose from a suit filed by Dangote Petroleum Refinery challenging the issuance and renewal of import licences granted to marketers and the NNPC.

The refinery is seeking an interim injunction restraining the Attorney-General of the Federation and relevant regulatory agencies from issuing or renewing licences for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Jet A1 imports.

Dangote Refinery argued that continued fuel importation undermines local refining and violates Section 317(9) of the Petroleum Industry Act, which it interprets as limiting imports to periods of verified domestic supply shortages.

The refinery, with a production capacity of about 650,000 barrels per day, maintained that Nigeria currently has enough domestic refining capacity to meet local demand.

It cited regulatory data showing that daily production of petrol and diesel already exceeds national consumption levels, making imports unnecessary.

Dangote Refinery also told the court that it has the capacity to satisfy 100 per cent of Nigeria’s refined petroleum needs while still generating export surplus.

The company described the refinery as a major national investment capable of creating a multi-billion-dollar market for Nigerian crude oil.

However, NNPC disputed the refinery’s claims, arguing that Dangote had not presented verifiable evidence proving it could independently guarantee Nigeria’s fuel supply requirements.

The NMDPRA has also applied to join the suit, widening the dispute into a broader legal and policy battle over fuel imports and competition in the downstream sector.

Dangote Refinery further accused government agencies, including the NMDPRA, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and NNPC, of creating a hostile business environment by continuing to issue import licences despite what it described as sufficient domestic refining capacity.

The refinery also alleged that NNPC had failed to provide enough crude oil for optimal operations, claiming it receives only about five crude cargoes monthly instead of the 13 needed to operate at full capacity, forcing it to source crude internationally at higher costs.

NNPC denied the allegation, insisting that crude allocation decisions are based on operational, commercial, security, and logistical considerations rather than any deliberate attempt to frustrate the refinery’s operations.

The legal dispute comes ahead of Dangote Refinery’s planned September initial public offering (IPO), raising concerns among investors about regulatory certainty and market stability in Nigeria’s oil and gas sector.

While NNPC warned that restricting fuel import licences could destabilise supply and increase price volatility, Dangote Refinery maintained that continued importation threatens Nigeria’s long-term goal of achieving energy self-sufficiency.

The refinery is also seeking an interim injunction restraining the issuance of new import licences pending the determination of the substantive suit.

The Federal High Court is yet to fix a hearing date for the case.