Oil Marketers Warn Against Potential Dangote Refinery Monopoly, Citing Economic Risks

 

Three leading oil marketing firms—AYM Shafa Limited, A.A. Rano Limited, and Matrix Petroleum Services Limited—have cautioned that a monopoly by Dangote Petroleum Refinery could bring severe economic consequences for Nigeria’s oil sector. In a statement to the Federal High Court in Abuja, the marketers claimed that Dangote’s push for market control could lead to escalating prices and energy insecurity.

The marketers raised these concerns in response to a lawsuit filed by Dangote Petroleum, case number FHC/CS/ABJ/1324/2024, which seeks to limit the issuance of import licenses by the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Dangote’s suit argues that import licenses should only be issued in cases of petroleum shortages, aligning with sections 317(8) and (9) of the Petroleum Industry Act (PIA). Dangote contends that the NMDPRA has failed to support local refineries like his, potentially disadvantaging domestic production.

However, the marketers maintain that they legally qualify for the import licenses granted by the NMDPRA, and argue that allowing Dangote to control petroleum production and supply would stifle competition and worsen Nigeria’s economic challenges. They warned, “If Nigeria relies solely on Dangote Refinery and halts imports, energy prices could rise uncontrollably, and a supply disruption would throw the country into a severe crisis due to the lack of strategic reserves.”

Highlighting the importance of competitive pricing, they noted that Dangote’s monopolistic control could lead to unchecked price increases, placing undue pressure on consumers and the nation’s economy. They emphasized that Nigeria needs a diverse petroleum supply to avoid leaving its energy security in the hands of a single entity.

The marketers defended the legality of their import licenses, stating that the licenses comply with the PIA, the Federal Competition and Consumer Protection Act, and other regulatory laws. They argued that the licenses do not impede Dangote’s operations and that competition within the sector is essential to maintaining fair pricing and stability for Nigerian consumers.