Oil Marketers Oppose Dangote’s Call for Import Ban, Warn Against Monopoly in Nigeria’s Fuel Market

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Olori Uwem

Active Member
Mar 18, 2024
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Oil Marketers Oppose Dangote’s Call for Import Ban, Warn Against Monopoly in Nigeria’s Fuel Market

Detailed Breakdown:

Three major oil marketing companies, AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited, have filed a legal opposition against a suit initiated by Dangote Petroleum Refinery and Petrochemicals at the Federal High Court in Abuja. The case centers around Dangote’s request to restrict the issuance of import licenses, aiming to position its refinery as the primary supplier of petroleum products in Nigeria.

Key Points from the Case:

1. Dangote’s Position: Dangote Petroleum Refinery contends that the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is breaching the Petroleum Industry Act (PIA) by issuing licenses to import petroleum products when local production could meet demand. Dangote’s refinery, currently producing a variety of fuel products, argues that imports should only be allowed when there is a shortage in local supply.
2. Marketers’ Counterargument: The opposing marketers claim that Dangote’s current output does not meet Nigeria’s daily fuel consumption needs. They argue that halting imports would create a monopoly for Dangote, driving up prices and increasing dependency on a single supplier. The marketers maintain that their licenses are lawful under the PIA and essential for competition.
3. Economic Concerns: The marketers warn that allowing Dangote to monopolize the market would worsen Nigeria’s economy by restricting competitive pricing. They emphasize that if the Dangote refinery were to face operational issues, the lack of alternative suppliers would lead to severe energy shortages.
4. Judicial Proceedings: Justice Inyang Ekwo has scheduled the next hearing for January 20, 2025, to review progress on potential settlements.

Global Market Impact:

Meanwhile, international firms Vitol Group, Trafigura Group, and BP have already secured significant export contracts with the Dangote refinery, accounting for 75% of its products since production began earlier this year. The refinery’s output, including diesel and jet fuel, is reshaping fuel supply dynamics across Africa and Europe, with the facility expected to reach full capacity at 650,000 barrels per day.

This case highlights the ongoing debate about balancing local production and market competition in Nigeria’s evolving energy landscape.