The Nigerian National Petroleum Company Limited (NNPCL) is still importing premium motor spirit (PMS), also known as petrol and Automotive Gas Oil (AGO), also known as diesel, despite Dangote Refinery having sufficient supply.
Interestingly, the Crude Oil Refiners Association of Nigeria has opposed petroleum marketers’ plans to import PMS, citing the availability of petrol from the newly operational Dangote Refinery.
NNPC imported a 1,846,548.202 million metric tonnes of diesel and petrol between October 1 and November 11, 2024, despite reports of excessive supply at Dangote Refinery.
This importation was facilitated through numerous petroleum marketers across the country, with Pinnacle Oil leading the pack.
Dangote Refinery has reportedly been producing AGO and Jet-A1 in excess of Nigeria’s daily consumption, yet NNPCL continues to issue import licenses to other companies.
This has led Dangote Refinery to seek legal action, asking the Federal High Court to void import licenses issued to NNPCL, Matrix Petroleum Services Limited, and four other companies.
Meanwhile, a source who spoke to SaharaReporters on Sunday said the marketers are bringing in the products to continue “their $200 million per month racket”.
The source said they tried to find out if the imported products, especially PMS is subsidized since that would be the only way they could offer a lower or equal price to Dangote Refinery’s.
“I asked whether the fuel is subsidized since that would be the only way they could offer a lower or equal price to Dangote,” the source said, adding that they were “told they can match or sell at lower price because the imports are off spec, blended and substandard”
According to the source, the NNPC is able to do this and get away with it because the state-owned oil company owns the “checking facilities so they can provide any quality certificates they want.”
The beneficiaries of the importation include Northwest, BOVAS, Shorelink, Dozzy, Rainoil, Matrix, Prudent, AYM Shafa, Emadeb, Deepwater, Raj, AA Tano, T-Time, Chisco and NNPC itself.
Efforts to reach Olufemi Soneye, NNPC spokesperson, for clarification on the ongoing importation of petroleum products despite Dangote Petroleum Refinery’s surplus, were unsuccessful.
Unfortunately, Mr. Soneye was unreachable by phone, and a text message sent to his number bounced back as undeliverable, indicating it was unreachable.
SaharaReporters reported on November 7, that three petroleum marketers had told the Federal High Court in Abuja that the Dangote Petroleum Refinery and Petrochemicals’ did not produce adequate Premium Motor Spirit for the daily use/consumption of Nigerians.
They maintained that there was nothing before the court to the contrary, stating that without them and others importing petroleum products into Nigeria, there would no doubt be a huge shortfall in petroleum products supply in the country, which will gravely hurt Nigeria’s economy and further inflict excruciating pains and hardship on Nigerians.
Three marketers, AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited, listed as 3rd, 4th and 7th Defendants in the Dangote’s suit, which stated this in a counter- affidavit in opposition to plaintiff Originating Summons in Suit No: FHC/ABJ/CS/1324/2024 before a Federal High Court in Abuja, also cited major oil producing countries such as United Arab Emirate, Saudi Arabia, United States of America, China, Venezuela and host of others that are still importing petroleum products despite being a net exporter of same products.
They told the court that it takes an average of two months for the Plaintiff (Dangote Petroleum Refinery and Petrochemicals FZE) to supply products ordered from it, adding that it “hardly ever meets the demand, as trucks wait for months to be loaded at the Plaintiff’s refinery, whereas it takes about three weeks to import petroleum products
In the affidavit which was deposed by one Ali Ibrahim Abiodun, Acting Managing Director of the 3rd Defendant, (AYM Shafa Limited), he told the court that there was no credible and verifiable “forensic material before it showing that the local consumption rate of Automotive Gas Oil (AGO) in Nigeria per day is 14 million litres or that the Plaintiff produces 15 million litres per day.
“That there is no credible and verifiable forensic material before this Honourable Court showing that the local consumption rate of Jet fuel (Jet A-1) in Nigeria is 2.5 million litres per day or that the Plaintiff produces 7.5 million litres of Jet fuel (Jet A-1) per day.
“That again, no credible and verifiable forensic piece of evidence is before this noble Court showing that the Plaintiff has the capacity to produce uninterruptedly 35 million litres of Automotive Gas Oil (AGO) and 9 million Jet A-1 products per day.
“That in light of the above, there is nothing before this Honourable Court showing that the Plaintiff is refining and supplying adequate petroleum products for the daily use/consumption of Nigerians,” he maintained.
The Defendants accused the plaintiff of jettisoning fair practice and introduced an oppressive trade practice which requires a buyer to deposit 110% in Letters of Credit (LC) of whatever quantity it wants to off-take and the off-taker is told of the actual price it would pay for what it has off-taken 5 days from the date of the LC date (i.e. after loading the product from the Plaintiff’s refinery.
The Defendants further told the court that healthy competition in businesses, trade and investment is the hallmark of a progressive, developing and developed economy.
The marketers had also expressed concerns over Dangote Petroleum Refinery and Petrochemicals’ plan to monopolise Nigeria’s energy sector, warning that allowing such monopoly would have devastating consequences for the country’s oil sector.
The Dangote Oil Refinery, a massive project by Africa’s richest man, Aliko Dangote, aims to transform Nigeria’s energy sector.
According to the company, once fully operational, it will be the largest refinery in Africa, producing 650,000 barrels per day. While this project promises to reduce Nigeria’s dependence on imported petroleum products and create jobs, the marketers claim it will harm the sector.
Dangote Petroleum’s lawsuit against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigeria National Petroleum Company Limited (NNPC), and several other petroleum companies has taken an interesting turn.
In the suit dated September 6, the plaintiff (Dangote Petroleum Refinery and Petrochemicals) prayed the court to declare that NMDPRA is in violation of Sections 317(8) and (9) of the Petroleum Industry Act by issuing licenses for the importation of petroleum products.
According to Dangote Refinery, import licenses for petroleum products should only be granted when there’s a proven shortage in domestic production.
This stance is based on Sections 317(8) and (9) of the Petroleum Industry Act (PIA), which restrict the issuance of import licenses to situations where local production can’t meet demands .
In essence, the company is advocating for a controlled importation process to ensure that domestic refineries like theirs can meet the country’s petroleum needs before resorting to imports.
But the marketers in their response dated November 5, 2024, told the court that they have a “total staff strength of 19,535 employees, majority of whom are Nigerians who earn a living from their remunerations and other fringe benefits accruing to them from the Defendants”.
According to them, the “bulk of the employees of the plaintiff (Dangote Refinery) are foreigners (Indians)”.
They told the court that “withdrawing the import licences lawfully and validly issued to the defendants or denying them further issuance of import licences will not only cripple the lawful businesses of the defendants which contribute immensely to Nigeria’s Gross Domestic Product (GDP) but will inescapably result in mass unemployment in the country, as the defendants will be constrained to retrench majority of their employees due to loss of business and earnings for the companies”.
The marketers said “vesting the Plaintiff with the power of monopoly in Nigeria’s petroleum industry as it seeks vide the instant suit, will kill competitive pricing of petroleum products in the country, further deteriorate Nigeria’s critically ailing economy and unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity”.