Dangote alleges crude supply sabotage by govt, NNPC objects

Dangote Petroleum Refinery and Petrochemicals FZE has accused the Nigerian Federal Government and its agencies, including the Nigerian National Petroleum Company Limited (NNPC), of deliberate sabotage that hinders its operations and investment in the country's downstream petroleum sector. The refinery lodged these accusations in an affidavit filed before the Federal High Court in Lagos, seeking an injunction against the issuance and renewal of petroleum import licenses.

The refinery's operations are reportedly anchored on crude oil supply arrangements with the NNPC, which it considers central to its business. However, the company alleges that the government has failed in its obligation to ensure adequate crude supply to local refineries. According to the affidavit, this failure is deliberate and harmful to the refinery's investment, forcing it to source a significant portion of its crude feedstock from international traders at premium prices on the spot market.

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However, contrary to the government’s obligation to ensure the adequate supply of crude oil to local refineries such as that of the applicant, the government, through the NNPC, has deliberately neglected to do so, in a bid to sabotage the applicant’s investment in the oil and gas industry in Nigeria.

Dangote Refinery stated that its current allocation from the NNPC amounts to only five crude oil cargoes per month, which is less than half of the 13 cargoes required to maintain full operational capacity and supply petroleum products. This shortfall significantly impacts its ability to meet domestic demand efficiently.

Furthermore, the refinery contends that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has continued to issue and renew import licenses to other companies, despite the Dangote Refinery producing above domestic demand. The refinery argues that this practice breaches the Petroleum Industry Act (PIA), specifically Section 317(9), which it believes should prevent such import licenses when domestic production is sufficient. The NNPC has refuted these claims and plans to challenge the refinery's lawsuit.

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In spite of full production by the applicant’s refinery, the reported production of the applicant’s refinery as published by the NMDPRA (both of which exceed national consumption) and the provision of Section 317(9) of the PIA… the NMDPRA has threatened and proceeded to issue import licences to other companies and petroleum marketers in violation of the provisions of the PIA.