The Federal High Court in Abuja on Wednesday dismissed Dangote Petroleum Refinery’s ₦100 billion lawsuit challenging the issuance of fuel import licences to the Nigerian National Petroleum Company Limited (NNPCL) and private marketers. The suit, filed in September 2024, sought to nullify licences on the grounds that the Petroleum Industry Act requires prioritisation of local refineries, a provision Dangote argued was ignored.
During Wednesday’s hearing, Dangote’s legal team requested discontinuance of the suit, citing an agreement with the defendants. Lawyers representing the NNPCL and private marketers pushed for outright dismissal, noting the case had progressed to the adoption of final written addresses. After hearing arguments, Judge Mohammed Umar dismissed the suit without costs, bringing closure to a dispute that had significant implications for Nigeria’s fuel market and energy policy.
The court ruling comes against the backdrop of a major policy shift by President Bola Tinubu, who recently approved a 15 percent import duty on petrol and diesel. The government said the measure is intended to strengthen local refining capacity, reduce dependence on imports, and boost energy security. Critics, however, have raised concerns that the tariff could drive up domestic fuel prices and limit competition, effectively conferring an advantage on Dangote Refinery, which produces nearly all locally refined petrol.
Dangote Refinery, Africa’s largest single-train refinery, began diesel and aviation fuel production in January 2024, before announcing petrol production in September. The refinery currently processes 650,000 barrels per day, with plans to expand to 1.4 million barrels daily, surpassing India’s Jamnagar Refinery. This expansion is expected to create up to 65,000 jobs and stimulate local industries, making Dangote a cornerstone of Nigeria’s domestic refining ambitions.
Economists say the dismissal of the suit and the introduction of the import duty are likely to have a profound economic impact. By reducing competition from imported fuel, the policy could enhance Dangote Refinery’s market share, stabilising revenues and potentially accelerating domestic investment in refining and related sectors. At the same time, higher fuel prices could exert inflationary pressures, affecting transportation, logistics, and manufacturing costs. Analysts warn that this may have short-term implications for household spending and broader economic growth if not managed carefully.
The court’s decision also highlights the evolving regulatory environment in Nigeria’s energy sector. The government has increasingly sought to align policy with industrial development goals, using fiscal instruments such as tariffs to encourage local production. While this approach may strengthen domestic refining capacity, it underscores the delicate balance policymakers must maintain between supporting local industries and protecting consumers from rising costs.
For private marketers and NNPCL, the ruling provides clarity and legal certainty. The continuation of fuel import licences ensures that supply chains remain operational, mitigating potential disruptions in a market that still relies on imports to bridge shortfalls. Observers note that the move also reinforces the government’s broader energy security objectives, particularly in light of global oil market volatility and domestic demand pressures.
The controversy surrounding the suit reflected broader tensions between regulatory policy, corporate interests, and market competition. Dangote Refinery had argued that prioritising local refining is a legal obligation under the Petroleum Industry Act, while critics accused the company of seeking monopolistic advantages. With the court’s dismissal, these debates now shift to the policy arena, where the effectiveness of import duties and other support measures in fostering a sustainable domestic refining sector will be closely watched.
The Federal High Court’s dismissal of Dangote Petroleum Refinery’s suit marks a turning point for Nigeria’s refining sector. Coupled with the newly approved 15 percent import duty, the decision is likely to reshape the domestic fuel market, incentivise local production, and influence pricing dynamics. The challenge for the government will be to ensure that these measures strengthen energy security and industrial development without placing undue burden on consumers or triggering inflationary pressures across the economy.
