Huhuonline.com can now authoritatively report that, Africa’s richest man, Aliko Dangote, has filed a landmark lawsuit against Nigeria’s top oil regulator, accusing it of failing to enforce critical crude supply obligations that have left his $19 billion refinery starved of feedstock and dependent on expensive crude imports. The lawsuit, filed against the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), targets the regulator’s alleged negligence in implementing the Domestic Crude Supply Obligation (DCSO) – a key provision in the Petroleum Industry Act (PIA) of 2021; requiring oil producers to allocate a portion of crude to local refineries.
In the suit, Dangote contends that international oil companies (IOCs) operating in Nigeria prioritize exports and engage in profit-maximizing sales through offshore trading arms, often bypassing the Dangote refinery despite legal obligations to supply it. Dangote further argues that the NUPRC has failed to hold these companies accountable. “How can a Nigerian refinery be forced to import Nigerian crude from overseas?” a source close to the Dangote refinery lamented. “This completely defeats the purpose of domestic refining and undermines our energy sovereignty.” Despite Nigeria’s status as Africa’s largest oil producer, the 650,000 barrels-per-day Dangote Refinery, the continent’s largest single-train facility, has been forced to source much of its crude from international markets; including US suppliers, at a premium; undermining its goal of achieving domestic energy security and reducing fuel imports.
This legal move follows previous clashes between the Dangote Refinery and regulators, including a now-withdrawn lawsuit against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) over the importation of allegedly substandard fuel products into the Nigerian market. The Dangote refinery had initially filed the suit to challenge the issuance of fuel import licenses by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to NNPC Ltd and five other companies: AYM Shafa Ltd, A.A. Rano Ltd, T. Time Petroleum Ltd, 2015 Petroleum Ltd, and Matrix Petroleum Services Ltd.
In the suit, filed at the Federal High Court Abuja, Dangote argued that the NMDPRA was in breach of the law by continuing to grant gasoline import permits to NNPC and other traders. According to Dangote, imports are only legally allowed to cover production shortfalls, a threshold it says is no longer applicable now that the Dangote refinery is operational. The refinery had demanded 100 billion naira ($66 million) in damages, claiming that Nigerian authorities continued to issue import licenses for products such as Automotive Gas Oil (diesel) and Jet A1 (aviation turbine fuel) to companies like NNPC Ltd, despite the local refining capacity.
NNPC Ltd opposed the suit through a legal filing, urging the court to dismiss the case. In addition, three of the oil marketers, AYM Shafa Ltd, AA Rano Ltd, and Matrix Petroleum Services Ltd, represented by senior advocate Ahmed Raji (SAN), also urged the court to dismiss the suit. In their joint counter-affidavit, the marketers argued that granting Dangote Refinery’s application would be detrimental to Nigeria’s oil sector. However, in March, the court dismissed the objections, allowing the suit to proceed. Despite the court’s green light, Dangote refinery withdrew the case. In a notice of discontinuance, the company’s lawyer, Ogwu Onoja, wrote: “Take notice that the plaintiff herein discontinues this suit against the defendants forthwith.” No reason was given for the withdrawal. No explanation was given for the decision. Although the case has been withdrawn, the court is still expected to convene on September 29, at which point the defendants may seek to recover legal costs or allow the matter to be struck out without penalty.
Energy sector analysts told Huhuonline.com that the latest lawsuit shines a harsh spotlight on the NUPRC’s ability, or inability to enforce one of the most critical domestic provisions of the PIA. If Dangote prevails, it could force the commission to take a firmer stand with oil majors, potentially reshaping Nigeria’s crude trade landscape. Should the courts uphold Dangote’s claim, international oil companies may face increased legal and public pressure to comply with DCSO rules, possibly limiting their reliance on high-margin exports. The Dangote Refinery’s ability to reach full capacity – it currently operates around 550,000 bpd – hinges on access to affordable local crude. Continued dependency on costly imports threatens both profitability and national energy ambitions. A steady domestic crude supply could stabilize Nigeria’s volatile fuel market, lower pump prices, and reduce strain on the naira. Conversely, failure to resolve the impasse could fuel inflation and worsen foreign exchange pressures.
While many support Dangote’s vision for local refining, some industry players worry the lawsuit could pave the way for near-monopolistic control over Nigeria’s downstream market, potentially stifling competition. The case is a litmus test for Nigeria’s resolve to implement energy reforms promised under the PIA. Analysts argue that lax enforcement of laws like the DCSO risks derailing the country’s long-term economic diversification and energy independence goals. The court is expected to hear the case in the coming weeks. Industry stakeholders, investors, and government officials are watching closely, as the verdict could reverberate across Nigeria’s oil ecosystem; from upstream operators to consumers at the pump. As Nigeria stands at a critical energy crossroads, the Dangote lawsuit may well determine whether the country reclaims control of its crude destiny or remains beholden to foreign markets for fuel; despite sitting atop one of the world’s richest oil reserves.
