A significant development in Nigeria's energy sector unfolded as a Federal High Court judge dismissed an objection by the Nigerian National Petroleum Company Limited (NNPC) to its inclusion in a lawsuit brought by Dangote Oil Refinery. The lawsuit seeks to halt the continued issuance of gasoline import permits, arguing that domestic production is now sufficient to meet the nation's demand.

The legal challenge, initiated by the 650,000-barrel-per-day Dangote refinery, centres on the assertion that the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) is acting unlawfully by persisting with gasoline import permits to NNPC and other fuel traders. The refinery, a monumental project by billionaire Aliko Dangote, contends that existing legislation permits imports only to address genuine production shortfalls, a condition it claims no longer exists.

Dangote Oil Refinery, which commenced processing crude into diesel, naphtha, and jet fuel in January 2024, and subsequently gasoline in September, maintains that its output can fully satisfy Nigeria's domestic gasoline needs. The refinery's lawsuit seeks 100 billion naira ($65 million) in damages from NMDPRA, NNPC, and five other fuel marketing companies.

NNPC, in its attempt to be removed from the lawsuit, argued that domestic fuel consumption still outpaces the refinery's production capacity, necessitating continued imports. Furthermore, NNPC challenged the lawsuit's validity, citing a discrepancy in its name, as the suit referenced "Nigeria National Petroleum Corporation" instead of its current legal name, "Nigeria National Petroleum Company Limited," adopted in 2022.

However, Judge Inyang Ekwo dismissed NNPC's objections, effectively keeping the state oil company as a defendant in the lawsuit. The judge adjourned the case until May 6, when he is scheduled to hear arguments from NMDPRA and NNPC seeking the lawsuit's dismissal due to a perceived lack of merit and their counterargument that Dangote refinery is attempting to establish a monopoly.

The outcome of this legal battle carries immense implications for Nigeria's energy landscape. Nigeria, despite its status as a major oil producer, has historically relied heavily on gasoline imports, incurring substantial costs. According to the National Bureau of Statistics, Nigeria spent a staggering 15.42 trillion naira ($10 billion) on gasoline imports in the previous year alone, underscoring the financial burden of this reliance.

The Dangote refinery's lawsuit represents the latest chapter in a series of disputes between the refinery and Nigerian regulatory bodies. The refinery has previously accused NMDPRA of allowing the importation of substandard fuels and criticized the upstream regulator for failing to enforce laws requiring oil producers to prioritize crude supply to domestic refineries. Both regulatory bodies have consistently denied these allegations.