A legal battle has erupted over concerns that Dangote Petroleum Refinery’s influence could monopolize Nigeria’s energy sector, prompting warnings from three prominent oil marketers about the potential dangers of such dominance. AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited have voiced serious concerns, arguing that Dangote’s refinery, if granted certain monopolistic powers, would lead to economic hardship and a lack of competitive pricing, further burdening the already strained Nigerian economy.
These oil marketers expressed their apprehensions in a counter affidavit filed on Wednesday in response to Dangote Petroleum’s suit in the Federal High Court in Abuja. They contended that a monopoly in favor of Dangote could lead to frequent price hikes, energy insecurity, and increased economic stress for Nigerian citizens.
“Vesting Dangote with the power of monopoly in Nigeria’s petroleum industry will kill competitive pricing of petroleum products, further deteriorate Nigeria’s critically ailing economy, and unleash untold hardship on Nigerians,” the marketers stated. They argued that Nigeria’s daily fuel demands surpass the production output of Dangote’s refinery, casting doubt on the facility’s capacity to meet national consumption needs consistently. Additionally, they claimed that the refinery’s fuel prices remain higher than those of imported alternatives, undermining its intended purpose to ease Nigeria’s reliance on fuel imports.
The Nigerian government has stepped in previously, with the Minister of State for Petroleum Resources, Heineken Lokpobiri, calling for cooperation among industry stakeholders to address these pressing concerns. Lokpobiri noted that all parties have shown a commitment to resolving the dispute, but the marketers’ concerns remain about the potential fallout of relying solely on Dangote for the nation’s petroleum needs.
Critics argue that Dangote’s dominance across multiple sectors reflects an advantageous position, fueled by government support as much as business acumen. Although the company’s refinery, which began operations in January, has the capacity to process 650,000 barrels of crude oil per day, the marketers insist that a sole reliance on it could endanger Nigeria’s energy security. They warned that any disruption in production could throw Nigeria into a fuel crisis, given limited national reserves and the lengthy process needed to secure imported fuel in times of shortage.
The dispute has brought to light the complex challenges facing Nigeria’s petroleum sector, raising questions about market dynamics, government intervention, and the need for a balanced approach to ensure the country’s energy security and economic stability.