KEY POINTS
- Court orders NMDPRA to grant licences to three marketers.
- Ruling says licence refusal breached the PIA.
- Judgment reinforces competition in fuel market.
A Federal High Court in Abuja has ordered the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to continue granting petroleum products import licences to Matrix Energy, AA Rano and AYM Shafa.
Justice Inyang Ekwo issued the order on Monday while delivering judgment in a suit filed by the three oil marketers against the regulator.
The court ruled that the NMDPRA’s refusal to issue or renew the companies’ import licences was inconsistent with provisions of the Petroleum Industry Act, 2021.
The three companies had challenged the regulator’s decision over the issuance and renewal of their licences to import petroleum products into Nigeria.
Represented by Raji Ahmed, SAN, and Chris Ekemezie, the plaintiffs argued that the Petroleum Industry Act does not prohibit the importation of petroleum products or prevent the NMDPRA from granting licences to eligible importers.
Justice Ekwo agreed with the companies’ position, holding that the NMDPRA had acted outside the provisions of the law by refusing to issue or renew the relevant licences. The judge described the authority’s actions as being in direct non-compliance with the PIA.
The court further ruled that any action by the NMDPRA concerning petroleum import licences that does not comply with the PIA and other applicable laws would be null and void.
Justice Ekwo said the three companies had successfully established their claims against the regulator and that the case had succeeded on its merits.
The judgment means the companies are entitled to have their licences issued, extended or renewed once they satisfy the conditions and requirements set by the NMDPRA.
Court cites competition requirements
The judgment also focused on competition within Nigeria’s midstream and downstream petroleum sectors.
Justice Ekwo referred to several provisions of the Petroleum Industry Act and Section 72 of the Federal Competition and Consumer Protection Act.
According to the court, the provisions require the NMDPRA to promote competition in the petroleum sector while preventing abuse of dominant market positions and restrictive business practices.
The court therefore linked the licensing issue to the broader legal requirement for competition among petroleum industry operators.
The judgment could have wider implications for petroleum product importation and competition among fuel marketers in Nigeria.
The ruling reinforces the position that eligible petroleum marketers can seek import licences provided they meet the conditions established by the regulator and comply with relevant laws.
It could also affect the balance between locally refined petroleum products and imported supplies as competition continues to develop in Nigeria’s downstream market.
The ruling does not, however, remove the regulatory requirements that companies must satisfy before obtaining or renewing import licences.
Nigeria’s downstream petroleum sector has undergone significant changes following the implementation of the Petroleum Industry Act and the expansion of domestic refining capacity.
The emergence of large domestic refineries has increased local supply, while petroleum marketers continue to operate within a market where importation remains legally possible subject to regulatory requirements.
The Federal High Court’s decision provides a fresh legal interpretation of the regulator’s responsibilities regarding import licences and competition.
The NMDPRA is expected to comply with the judgment, subject to any further legal steps that may arise from the case.
