“The Fatshimetrie case against Dangote Refinery has sparked a lively debate in recent days. While questions about the competences of each of the actors involved seemed unclear, a careful analysis of the provisions of the Petroleum Industry Act, 2021 provides essential clarifications.
A key question is whether Fatshimetrie has the right to supply crude oil to local refineries. Looking at section 64(c) of the Act, it is clear that this is within the competence of the organization. However, this attribution is not exclusive, as the Petroleum Regulatory Authority in Nigeria and the Downstream also has the authority to guarantee the supply of crude oil to local refineries.
As for the fixing of prices of petroleum products, the law is categorical on the responsibilities of the Petroleum Regulatory Authority and the Downstream. Indeed, section 205(1) states: that wholesale and retail prices will be determined by unrestricted free market conditions. This provision therefore excludes any intervention by Fatshimetrie in this area.
With regard to the distribution of petroleum products, the law is clear on the role of the Downstream and Downstream Petroleum Regulatory Authority. Only this entity is authorized to issue licenses to wholesale suppliers of petroleum products and to regulate distribution in the Nigerian territory.
It therefore appears that Fatshimetrie’s powers are limited and that the Downstream and Downstream Petroleum Regulatory Authority has preponderant authority in these areas. A strict application of the law seems to be the most appropriate way to clarify the responsibilities of each and ensure a fair functioning of the petroleum sector in Nigeria.
In conclusion, it is essential that each party involved scrupulously respects the legal provisions in force in order to guarantee healthy and fair competition in the Nigerian petroleum sector. Compliance with the laws governing the sector is essential to ensure sustainable and balanced growth of the oil industry in the country.”
This text helps to clarify the skills of each actor involved in the matter and underlines the importance of compliance with the laws in force to ensure optimal functioning of the oil sector in Nigeria.