We sued NNPCL over oil imports but dispute nears resolution after FG order – Dangote

Dangote Refinery has confirmed that it initiated legal action against the Nigerian National Petroleum Company Limited (NNPC) and other companies, although recent developments have overtaken the lawsuit.

The company revealed that discussions are underway to resolve the issue, with plans to withdraw the case in January 2025.

The confirmation came in response to reports of a lawsuit filed at the Federal High Court in Abuja.

The case, numbered FHC/ABJ/CS/1324/2024, sought to void import licences granted to the NNPC, Matrix Petroleum Services Limited, A.A. Rano Limited, and four other companies for importing petroleum products such as diesel and aviation fuel.

Additionally, the Dangote Refinery requested N100 billion in damages from the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), accusing it of continuing to issue import licences despite the refinery’s objections.

Matter Overtaken by Recent Developments
Speaking on the matter, Anthony Chiejina, Group Chief Branding and Communications Officer for Dangote Refinery clarified that the lawsuit stemmed from issues dating back to June 2024.

He emphasised that although the legal process began on September 6 2024, recent discussions between the parties, prompted by a government directive, have rendered the lawsuit less relevant.

“No fresh case was filed against NNPC or any other company. This is an old issue that started in June and culminated in a matter being filed on September 6, 2024. We have made tremendous progress in our discussions,” Chiejina said.

He noted that the parties involved have been in talks following President Bola Tinubu’s directive that crude oil and refined products within Nigeria should be sold in naira.

The directive, approved by the Federal Executive Council (FEC), has played a pivotal role in resolving the dispute.

“Since the President’s directive on crude oil and refined products sales in naira, we have agreed to halt the legal proceedings. No court orders have been issued, and there are no adverse effects on any party involved,” he added.

Chiejina also revealed that while the case is scheduled to resume in January 2025, Dangote Refinery intends to formally withdraw the lawsuit at that time.

Background and Rising Tensions
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The lawsuit followed months of tension between the Dangote Group, the NNPC, petroleum regulators, and private oil companies.

In June 2024, Dangote Group accused certain international oil companies of sabotaging their operations by refusing to supply crude oil or offering it at higher-than-market premiums.

The Dangote Group also clashed with the NMDPRA over claims that the refinery’s diesel contained sulphur levels higher than the allowed threshold. The NMDPRA accused the company of trying to monopolise the downstream petroleum market.

However, Aliko Dangote, Chairman of the Dangote Group, refuted these claims. During a visit by lawmakers to the refinery, Dangote presented laboratory test results showing that diesel from the refinery had significantly lower sulphur content than imported samples.

In July, the Federal Executive Council intervened, directing NNPC Ltd to resolve the dispute and initiate crude oil sales to Nigerian refineries in naira. This directive, in turn, led to a broader policy shift aimed at reducing the dollarisation of transactions in the country’s oil and gas sector.

The Nigerian government officially implemented the naira-based sales of crude oil and refined products on October 1 2024.

The move aligns with the federal government’s broader goal of promoting local currency use and easing financial pressures on domestic refineries.

Moreover, the NNPC has ended its exclusive purchase agreement with Dangote Refinery, a development confirmed by Wale Edun, the Nigerian Minister of Finance and Coordinating Minister of the Economy.

This policy shift means that other oil marketers can now negotiate directly with Dangote Refinery for fuel supplies, marking the end of NNPC’s role as the sole purchaser of petrol from the refinery.

With these changes, the lawsuit Dangote filed against the NNPC and other companies appears to be a relic of past disagreements.

As Chiejina pointed out, “We have made significant progress, and by January 2025, we will be in a position to formally withdraw the matter in court.”

The ongoing discussions between the refinery and its counterparts signal a resolution that could foster better cooperation within the petroleum sector.