• Dangote withdraws suit against petrol import licences amid new import tariff
Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, has called for the full privatisation of all government-owned refineries, saying it is evident that the country may never succeed in restoring them to functionality under the present dispensation.
Speaking through a statement yesterday, the DG said selling off the refineries would stop the commitment of scarce financial resources to an evidently irredeemable venture.
Also, Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, said the Federal Government is open to selling the refineries of the Nigerian National Petroleum Company Limited (NNPCL).
This was as the Federal High Court in Abuja, yesterday, dismissed the N100 billion suit filed by Dangote Petroleum Refinery to challenge the issuance of licences for the importation of petroleum products into the country.
Ajayi-Kadir, however, commended the recent approval of the 15 per cent import tariff on petrol and diesel, noting that it aligns with the Nigeria First agenda and MAN’s long-standing advocacy for local content development and patronage of Made-in-Nigeria goods.
Adding that this has reassured domestic manufacturers, he said it exemplified the commitment to guaranteeing energy sufficiency and security, as well as improving the overall well-being of Nigerians. He said it would help promote local value addition, strengthen domestic refining capacity, conserve FX and advance Nigeria’s long-term industrialisation objectives.
The DG further noted that this would make sure that the Naira-for-crude arrangement that would guarantee effective and reliable supply of crude to local refineries and reduce pressure on scarce FX succeeds.
“It will also attract more investors, including holders of the 30 refinery licences to commit resources in the sector. There is no better path to fixing Nigeria’s economy than protecting local industries, encouraging local patronage, fostering value addition and promoting industrial development anchored on local content.”
Regretting that despite being blessed with enormous oil resources, he said the country still commits scarce FX in billions of dollars to import refined petroleum, adding that supporting local refining capacity through appropriate policy tools will improve the Naira’s stability and foster a more favourable macroeconomic environment for investment. He added that the tariff will accelerate operational readiness of domestic refineries, reduce disruptions and stabilise energy supply to industries.
Expressing a commitment to the Federal Government’s Nigeria First policy direction, especially on local content development and homegrown industrialisation, Ajayi-Kadir reiterated that the new tariff would accelerate the country’s journey towards energy sovereignty, industrial competitiveness and sustainable economic growth, all anchored on the strength of Made-in-Nigeria.
DANGOTE Refinery filed the suit in September last year against the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), NNPCL, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA),
AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited and Matrix Petroleum Services Limited.
In the suit, the refinery sought an order voiding the import licences issued to the NNPCL and the private companies. But the judge, Mohammed Umar, dismissed the suit after the refinery’s lawyer applied for its withdrawal yesterday.
The plaintiff, through its lawyer, C.O. Adegbe, informed the court that it filed the notice for the discontinuation of the suit on July 28. She told the court that the plaintiff had agreed with the defendants that the matter be struck out.
Although the refinery had filed the notice to discontinue the suit in July, yesterday’s proceeding, in which the company’s firm moved to act on it, came about two weeks after President Bola Tinubu approved a 15 per cent import duty on petrol and diesel.
The policy is a controversial move, which the government claims is aimed at supporting local refining and boosting energy security, but which critics argue could lead to an increase in fuel prices. Many perceive the policy as an anti-competition measure to confer an advantage on the refinery’s business.
The President’s approval was contained in a letter with reference no: PRES8197/HAGF/100/71/FIRS/40/88-2/NMDPRA/2, dated October 21. The letter was addressed to the Attorney General of the Federation and Minister of Justice, Federal Inland Revenue Service (FIRS) and the NMDPRA.
Essentially, the tariff would ensure that imported petrol is not cheaper than that of Dangote, which produces virtually all of Nigeria’s local consumption. The implementation of the tariff will commence in approximately a month, following the request by the Chairman of FIRS, Zacch Adedeji, whose memo triggered the presidential approval.
The tariff allows for a 30-day window and adds to the controversy around petrol import and production in Africa’s largest oil producer. The letter, titled ‘Re: introduction of a market-responsive import tariff framework on Premium Motor Spirit (PMS) & Diesel,’ was signed by Damilotun Aderemi, the Private Secretary of the President.
Just days after the policy became public, the refinery, the largest in the West African country, announced that it produced enough petrol and diesel for local consumption.
At the resumed hearing yesterday, the refinery’s lawyer, Ms Adegbe, urged the court to terminate the case on the grounds of the refinery’s decision to withdraw it.
