BY FRONTLINE REPORTERS

A Federal High Court ruling in Abuja directing the Nigerian Midstream and Downstream Petroleum Regulatory Authority to continue granting and renewing petroleum products import licences has opened a fresh front in the dispute over fuel imports as Nigeria’s domestic refining capacity expands.

The judgment has placed the Abuja ruling alongside a pending suit filed by Dangote Petroleum Refinery at the Federal High Court in Lagos, where the refinery is challenging the continued issuance and renewal of petroleum product import licences.

While petroleum marketers have welcomed the Abuja judgment and called for continued access to import licences, the ruling has also reignited debate over whether domestic refineries should be protected from import competition and whether the Petroleum Industry Act provides an adequate framework for Nigeria’s changing downstream market.

The Petroleum Products Retail Outlets Owners Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria said competition between local refiners and importers could improve petrol availability and affordability.

The development comes against the backdrop of rising fuel imports. Import licences issued by the regulator have facilitated the importation of an average of 95.7 million litres of petrol daily, amounting to 23.2 billion litres between January and August 2026.

Abuja ruling

The PUNCH reports that Justice Inyang Ekwo of the Federal High Court in Abuja ordered the NMDPRA to continue granting, issuing, extending, renewing or reissuing petroleum products import licences to Matrix Energy, A.A. Rano Nigeria Limited and AYM Shafa Limited.

In his judgment, Ekwo held that the regulator’s refusal to issue or renew the companies’ import licences amounted to “direct non-compliance” with the Petroleum Industry Act, 2021.

The judge ruled that the NMDPRA had acted beyond the provisions of the law in its handling of the companies’ applications. He further held that any regulatory action taken in violation of the PIA and other relevant laws would be “null and void.”

The three marketers had approached the court seeking declarations that the PIA did not prohibit the importation of petroleum products into Nigeria or prevent the NMDPRA from granting and renewing licences for eligible importers.

They also argued that the regulator had a statutory responsibility to promote competition in the midstream and downstream petroleum sectors.

Justice Ekwo agreed with the plaintiffs, holding that relevant provisions of the PIA, read alongside Section 72 of the Federal Competition and Consumer Protection Act, placed an obligation on the NMDPRA to promote competition and prevent the abuse of dominant positions and restrictive business practices.

The court consequently declared that the three companies were entitled to the issuance, extension or renewal of petroleum products import licences, provided they fulfilled the conditions stipulated by the regulator.

Specifically, the court directed the NMDPRA to “continue to grant, issue, extend, renew, or reissue” licences, permits and authorisations for midstream and downstream petroleum operations, particularly those relating to the importation of petroleum products.

The order, however, was subject to the companies meeting all applicable statutory and regulatory requirements.

The case followed allegations by the marketers that the NMDPRA had failed to regularly issue or renew their import licences.

In an affidavit, the Executive Director of A.A. Rano Nigeria Limited, Sabiu Saidu Mahuta, alleged that since July 2025, the regulator had granted or renewed the companies’ import licences only sporadically.

He argued that the situation was contributing to market dominance and the monopolisation of the downstream petroleum sector by local refineries.

The companies also told the court that they had collectively invested more than $20bn in infrastructure, logistics and retail networks for their petroleum businesses.

Their counsel, Raji Ahmed, SAN, argued that allowing both imports and domestic production would promote competition, check monopoly and price-fixing, and strengthen the midstream and downstream petroleum sectors.

Dangote’s pending suit

The Abuja ruling comes as Dangote Petroleum Refinery pursues a separate legal challenge at the Federal High Court in Lagos, seeking to stop the NMDPRA from issuing import licences to the Nigerian National Petroleum Company Limited and other petroleum marketers.

The Lagos court had in June fixed October 7 for hearing in the suit filed by the refinery challenging the Federal Government’s issuance of fuel import licences to NNPC and several marketers.

In suit No. FHC/L/CS/857/2026, Dangote Refinery is asking the court to nullify import licences allegedly issued or renewed around May 6, 2026, in favour of NNPC and marketers including NIPCO, A.A. Rano, Matrix Energy, AYM Shafa, Pinnacle and Bono.

The refinery further argued that the licences were issued in breach of an earlier court order of April 29, 2026, directing the parties to maintain the status quo pending the determination of the case.

The existence of two cases before courts of coordinate jurisdiction could add another layer of complexity to the dispute, particularly because Dangote Refinery was not a party to the Abuja proceedings.

Meanwhile, the NMDPRA recently approved 830,000 metric tonnes of petrol imports for the fourth quarter of 2026, with Matrix Energy, A.A. Rano and AYM Shafa among six companies issued permits.

Marketers back continued imports

Reacting to the Abuja judgment, the National President of PETROAN, Billy Gillis-Harry, described the ruling as beneficial to consumers, arguing that diversifying supply sources could improve petrol availability and affordability.

“The court ruling means a lot. It means victory for the Nigerian people. Once every stakeholder in the industry is focused on ensuring that there is availability of petroleum products, then affordability issues will become something that will be addressed,” he said.

Gillis-Harry said the ruling should not be limited to the three companies involved in the case, arguing that qualified companies should have access to import licences.

He said, “The licensees should not be limited to only the three companies. It should be available to every company that has the capacity to import products and supply Nigerians at an affordable price and available to everyone.”

He added that supply diversification would help guarantee affordability.

Gillis-Harry also commended the NMDPRA, saying the judgment reinforced the regulator’s responsibility to protect consumers and maintain competition in the market.

Similarly, the National Publicity Secretary of IPMAN, Chinedu Ukadike, said the judgment should be respected, noting that marketers would continue to source products from suppliers offering competitive prices.

“The court is a court of justice, and I know that they have looked at the pros and cons. They also looked at the document submitted before it, and they reviewed the Petroleum Industry Act,” Ukadike said.

He said marketers would consider both domestic and imported products based on price and availability.

“If Dangote is producing and it’s cheap, we will look at it and buy from them as marketers. On the other hand, if products from importers are cheaper, we would also buy from them,” he said.

“Our business is to ensure that we continue to service and buy products at the cheapest rate and sell to our numerous consumers.”

Concerns over conflicting court decisions

A major petroleum marketer, who spoke on condition of anonymity because of the sensitivity of the matter, expressed concern about the increasing reliance on courts of coordinate jurisdiction to resolve disputes within the midstream and downstream petroleum sectors.

The operator said the conflicting legal battles could create uncertainty for an industry that requires stability and predictable regulation.

“It is sad that we found ourselves in this situation. We now have different courts giving rulings in favour of different groups,” the operator said.

He questioned the implications of the Abuja judgment for the pending Dangote suit in Lagos, noting that the refinery was already challenging the issuance of import licences.

However, the Vice President of IPMAN, Hammed Fashola, said the court cases were necessary to clarify the interpretation of the PIA.

“If there is any dispute, I think the right place to go is the court. Don’t forget that we have the PIA, and if there is any issue that is controversial, the best place is to approach the court for interpretation,” Fashola said.

He urged the parties to await the outcome of the judicial process or pursue dialogue to resolve areas of disagreement.

Fashola also said the existence of parallel legal proceedings should not trigger panic or fuel scarcity, noting that the parties had access to the appellate courts if conflicting judgments emerged.

“They are in the high courts now. I think the Appeal Court is still there and the Supreme Court is also there. So, they will explore all the legal avenues that are available,” he said.

He urged Dangote Refinery, importers, regulators and other stakeholders to avoid actions that could disrupt fuel supply.

“We should just appeal to them that we should not do anything that will interrupt the peace that we are enjoying now, especially the availability of products in the country,” Fashola said.

Experts divided over import policy

Energy sector expert Dan Kunle called for an immediate review of the PIA, arguing that its provisions on petroleum product imports no longer adequately reflect Nigeria’s evolving refining landscape.

Kunle said the courts were applying the law as written but argued that the legislation had been enacted before the emergence of large-scale private refining capacity such as the Dangote refinery.

“If you go by the provisions of the Petroleum Industry Act, the court is just trying to align with the law. But at the time the PIA was passed, lawmakers did not foresee that a refinery of this magnitude would come on stream to meet all our domestic needs,” he said.

Kunle called on the Federal Government and relevant regulators to initiate an amendment of the Act.

He proposed that fuel imports under a revised framework should be tied to demonstrable national supply requirements, rather than operate as a default market mechanism.

He argued that allowing unrestricted imports when domestic refining capacity is available could undermine investment in local refining, while acknowledging the need for imports where domestic supply falls short.

CORAN seeks gradual phase-out of petrol imports

The Crude Oil Refinery-Owners Association of Nigeria has called for a gradual reduction and eventual phase-out of petrol imports, while raising concerns over the difficulty faced by some domestic refineries in securing crude oil on commercially viable terms.

The Chairman of CORAN, Momoh Oyarekhua, made the call on Monday at the third Nigeria Oil Refining Summit organised by the association in Lagos.

Oyarekhua said Nigeria’s refining sector had made significant progress but that some local refineries remained constrained by access to crude.

“We acknowledge the remarkable progress made in domestic refining. Local refining is increasingly transforming Nigeria’s fuel supply landscape, demonstrating what is possible when investment, policy, and industry align,” he said.

“However, significant challenges remain. Despite our abundant crude resources, some domestic refineries continue to face difficulties accessing crude oil on commercially viable terms. At the same time, fuel imports persist while local refining capacity remains underutilised.”

He called for the full institutionalisation of the naira-for-crude policy, with transparent access for qualifying domestic refineries, including modular plants.

Oyarekhua also urged the Federal Government to strengthen enforcement of the Domestic Crude Supply Obligation under Section 109 of the PIA while preserving commercial arrangements between crude producers and refiners.

He proposed a domestic crude pricing framework that would take into account crude quality, delivery points, international logistics costs avoided and domestic transportation expenses.

He also advocated crude swaps and proximity-based supply arrangements to enable nearby oil-producing assets to supply refineries without routing crude through distant export terminals.

On petroleum product imports, Oyarekhua called for a progressive reduction, with imports restricted to objectively determined domestic supply shortfalls and strategic stock requirements.

“Refining for value means more than producing fuel. It means retaining foreign exchange, creating jobs, developing local expertise, supporting petrochemicals and manufacturing, and capturing greater economic value within Nigeria,” he said.

Oyarekhua said continued reliance on imported petroleum products despite growing domestic refining capacity undermined Nigeria’s efforts to maximise the economic value of its crude resources.

“Nigeria should not continue exporting crude, exporting jobs and importing the same petroleum products at considerable economic cost,” he said.

The CORAN chairman also called for a dedicated financing framework to support the construction of new refineries and the expansion of existing facilities.

He said such a framework should provide long-term financing, guarantees and refinancing mechanisms to address the funding constraints confronting refinery operators.

Chike-Obi opposes indefinite protection for local refineries

Meanwhile, economist Mustafa Chike-Obi has argued against giving domestic refineries indefinite protection from import competition.

Speaking on the Policy without Politics podcast with development economist Dr Ken Ikpe, the former Chairman of Fidelity Bank Nigeria said protection, where considered necessary, should be time-bound.

“I am an opponent of refineries having an unlimited period of time while their products are banned from competition,” he said.

Chike-Obi argued that prolonged protection could reduce the incentive for refiners to remain competitive, adding that consumers ultimately needed reliable and affordable products.

He also questioned continued government investment in the rehabilitation of the state-owned refineries in Port Harcourt, Warri and Kaduna.

According to him, the facilities are based on older technology and may not achieve the efficiency of newer, large-scale refineries.

Chike-Obi argued that government resources could instead be directed towards more efficient industrial infrastructure and other productive sectors.

He also pointed to the Dangote refinery as evidence that large-scale refining could be developed successfully in Nigeria.

The debate over fuel imports therefore remains centred on competing priorities: ensuring adequate and affordable fuel supply, maintaining competition, protecting investment in domestic refining, and establishing a clear regulatory framework for a market in which Nigeria’s refining capacity is expanding.

For now, the Abuja judgment has strengthened the position of importers seeking continued access to licences, while the pending Lagos case presents a separate legal challenge that could further shape how petroleum imports and domestic refining coexist under the Petroleum Industry Act.