Petrol marketers under the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) have vowed to resist a lawsuit filed by Dangote Petroleum Refinery challenging the issuance of new petrol import licenses in the country. The legal action follows approvals granted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to six companies to import about 720,000 metric tonnes of Premium Motor Spirit (petrol) to support domestic supply.
Background of the Dispute
The companies granted approval to import petrol include NIPCO, AA Rano, Matrix Energy, Shafa, Pinnacle Oil, and Bono Energy. In court papers, Dangote Refinery argued that the import permits are null and void, citing violations of the Petroleum Industry Act (PIA) when there is no supply shortage. The refinery prayed the Federal High Court in Lagos to declare the permits illegal.
DAPPMAN's Response
Reacting to the legal action, DAPPMAN on Sunday, March 17, stated that it will challenge any attempt to cancel the licenses. The association emphasized that the licenses are crucial for ensuring a constant supply of fuels across Nigeria. DAPPMAN said: "The import licenses being challenged in the suit are not an administrative clemency; they are a legitimate operational framework through which Nigeria's supply chain of fuels operates. The licenses granted to marketers and other downstream operators represent a huge investment of over a billion dollars across storage depots, logistics, distribution, and retail networks across the country."
The group warned that a suit aimed at nullifying these licenses would not only impact the businesses concerned but also introduce huge volatility across the entire downstream value chain. DAPPMAN described the legal action as a bid by one firm to take monopoly of the entire downstream market, a position that cannot be attained due to the presence of several other strong market participants that have also invested trillions of naira in making fuels readily available nationwide.
IPMAN and PETROAN Weigh In
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also expressed objection to the suit. IPMAN Vice President Hammed Fashola argued that market-driven imports rather than legal injunction should be the basis for fuel supply. He urged Dangote to concentrate on reasonable pricing rather than seeking an importation ban, warning of the possibility of further fueling monopoly fears.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) likewise considered the suit unnecessary and an impediment that fuels fear and uncertainty in the market.
Dangote Refinery's Position
Earlier, Dangote Refinery debunked claims by oil marketers that it cannot meet local fuel demand. The refinery's officials disclosed that the facility has enough fuel to meet local demands and for export. A consultant to the Dangote Refinery challenged the depot owners, IPMAN, and PETROAN to disclose the quantity of fuel the refinery has in stock before concluding on capacity.
The legal battle highlights the ongoing tensions in Nigeria's downstream petroleum sector as stakeholders grapple with market dynamics and regulatory frameworks under the Petroleum Industry Act.
