Petroleum marketers have again rebelled against the latest move by Dangote Petroleum Refinery aimed at preventing fuel imports into the country in the Nigerian downstream petroleum sector.
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) on Sunday argued that the fuel import licences issued by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) cannot be stopped as they are essential to ensure fuel supply to the country and its energy security.
The association’s response came after it claimed the Nigerian National Petroleum Company Limited (NNPC) and some petroleum marketers were granted import licenses by the NMDPRA in a court case filed by the Dangote Petroleum Refinery Company (DPRC) which sought to set aside the import permits issued to the marketers and NNPC.
The refinery says the approvals are in opposition to an earlier court ruling asking for a status quo to be maintained while the dispute is settled.
The conflict has resurfaced within the oil industry just a year after Dangote Refinery dropped a previous case against similar import approvals issued to NNPC and oil traders.
However, in a spirited rebuttal to the regulator’s stance, DAPPMAN said the import licences were not arbitrary or illegal as they were issued under the Petroleum Industry Act (PIA).
The NMDPRA has the statutory power to issue import licences during a period of time when there is a requirement for supply security, the marketers’ body said.
The association said fuel import approvals must not be seen as an action against any local refinery, big or small, irrespective of its market power.
There was also a fear that the attempts to invalidate the existing import licences would cause uncertainty in the downstream petroleum sector and affect the stability of fuel supply in the country, DAPPMAN warned.
The industry operators argue that the conflict is occurring at an opportune time for Nigeria’s deregulated petroleum market as operators try to adapt to new supply dynamics, pricing realities and the emergence of domestic refining capacity.
The marketers also revealed that member companies had spent billions of naira on the establishment of depot infrastructure, distribution systems, logistics operations and processes for regulatory compliance on the assumption that their licences were legally valid and enforceable.
The association says a disruption of the existing licensing system could have broader ramifications for market confidence, investment stability and product availability.
Industry players say the resurgence of the dispute is due to the growing competition that is being faced by the downstream petroleum market in Nigeria due to the expansion of the Dangote Refinery’s operations.
The legal battle may have a bearing on balancing local refining industry dominance and the ongoing fuel importation as a means to energy security at the national level, analysts said.
The controversy is no longer about import licences; it is an all out battle for market share, regulatory control and the direction of the developing petroleum industry in Nigeria for many operators.
