Dangote’s Bid For Monopoly ‘Recipe For Disaster’ In Nigeria – Marketers Tell Court

Three prominent oil marketers have cautioned the Federal High Court in Abuja that allowing Dangote Petroleum Refinery to monopolize Nigeria’s oil industry would bring serious consequences for the country’s economy and energy security.

The marketers—AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited—argued that Dangote’s attempt to dominate the petroleum market would lead to skyrocketing fuel prices and an overreliance on a single source for energy needs.

In their responses to a lawsuit Dangote filed under case number FHC/CS/ABJ/1324/2024, they contended that Dangote does not currently produce enough petroleum to meet Nigeria’s daily consumption demands, with no evidence provided to suggest otherwise.

Dangote’s suit, filed in September 2024, seeks a declaration from the court that the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) violated sections of the Petroleum Industry Act (PIA) by issuing licenses for petroleum imports.

Dangote argues these licenses should only be issued during shortages and also claims that NMDPRA is failing to support local refineries, like Dangote’s, in line with the PIA.

However, in a counter affidavit dated November 5, 2024, the marketers, through a representative, Ali Ibrahim Abiodun, defended their right to receive import licenses, asserting that allowing Dangote exclusive control would stifle competition, inflate fuel prices, and worsen the economic crisis facing Nigeria.

They warned that halting petroleum imports to enable Dangote’s monopoly could lead to severe energy instability.

In the event of any disruption at Dangote’s facility, they argued, Nigeria could face a fuel crisis, as the nation lacks the reserve capacity to sustain itself while awaiting imports.

The marketers argued, “If Nigeria puts all her energy eggs in one basket by stopping importation of petroleum products and allowing the Plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products in Nigeria will continue to rise and energy security will elude Nigeria.

“In the event of any breakdown in or obstruction to the production chain of the plaintiff which stops it from producing, Nigeria will be thrown into energy crises as Nigeria does not have the reserves that would last it for the at least 30 days that it would need to order, pay for, freight and import refined products into tanks in Nigeria.

“Amidst the glaring absence of any credible and demonstrable proof that the Plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians, giving the plaintiff (Dangote) judicial imprimatur to be the sole supplier of refined petroleum products to Nigerians, thereby encouraging monopoly in a major aspect of Nigeria’s oil industry, is a recipe for disaster in Nigeria’s energy sector.”

The marketers also criticized Dangote’s claim that import licenses undermine its refinery business, emphasizing that their licenses adhere strictly to the Petroleum Industry Act, Federal Competition and Consumer Protection Act, and other relevant laws.

They maintained that their legally obtained licenses did not impede Dangote’s business operations or refinery output.

“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the plaintiff’s business or its refinery.

“The import licences issued to the defendants by the 1st defendant are in line with the provisions of Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018 and other relevant laws,” the marketers stressed.

Additionally, the marketers stated that granting Dangote’s request for exclusive rights would place Nigerian consumers at the mercy of one company, affecting availability and pricing of fuel nationwide.

They urged the court to consider the broader implications for Nigeria’s economy and to uphold competitive practices that protect both consumers and the market.