Africa (Commonwealth Union) _ The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has defended its decision to issue oil import licenses to the Nigerian National Petroleum Company Limited (NNPC Ltd) and several oil marketers, citing the need to address petroleum product shortages in the country.
This statement was made in response to a lawsuit filed by Dangote Refinery and Petrochemicals FZE, which accused NMDPRA of violating the Petroleum Industry Act (PIA) by granting such licenses. Dangote Refinery asked for N100 billion in damages, saying that these licenses took away from its role as a local refinery and broke Sections 317(8) and (9) of the PIA, which say that import licenses can only be given when there aren’t enough supplies in the country.
In a counter-affidavit filed by NMDPRA, Idris Musa, a senior regulatory officer, argued that Dangote Refinery’s current production levels are insufficient to meet the country’s daily petroleum demands. To ensure a steady supply and prevent market disruptions, NMDPRA granted licenses to entities with proven international trading records.
NMDPRA also emphasized its mandate to promote competition and prevent monopolies in the oil sector. It highlighted the risks of relying solely on Dangote Refinery for national supply, stating that a monopoly could jeopardize energy security and inflate prices.
While acknowledging Dangote Refinery’s contributions, NMDPRA underscored its support for local refineries and noted that four functional modular refineries, along with NNPC’s four facilities under maintenance, are part of the efforts to meet demand.
Regarding allegations of unfair levies, Musa clarified that a 0.5% levy is mandated by the PIA and applies to all wholesale petroleum transactions. He dismissed claims that Dangote Refinery, as a free-zone entity, is exempt from such levies, emphasizing its obligation to comply with national regulations.
Musa refuted accusations of a conspiracy against Dangote Refinery, calling the claims unsubstantiated. He asserted that the agency’s actions align with its responsibility to ensure energy security, prevent supply disruptions, and foster a competitive market environment.
