FUEL IMPORT: FRESH BATTLE EMERGES AFTER ABUJA COURT RULING

By:Aminat Tajudeen

The Federal High Court in Abuja’s directive compelling the Nigerian Midstream and Downstream Petroleum Regulatory Authority to continue issuing and renewing petroleum products import licences has reignited the debate over fuel imports as Nigeria’s domestic refining capacity grows.

The Abuja judgment comes amid a separate case before the Federal High Court in Lagos, where Dangote Petroleum Refinery is challenging the continued issuance and renewal of licences for the importation of refined petroleum products.

Petroleum marketers have welcomed the Abuja ruling, insisting that eligible operators should retain access to import licences. The development, however, has intensified discussions over whether local refineries should be shielded from import competition and whether the Petroleum Industry Act provides sufficient guidance for the evolving downstream market.

The Petroleum Products Retail Outlets Owners Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria argued that allowing locally refined products and imported fuel to compete could improve product availability and help moderate prices.

Import licences issued by the regulator have enabled the country to bring in an average of 95.7 million litres of petrol daily, amounting to about 23.2 billion litres between January and August 2026.

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

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

The judge ruled that the NMDPRA had exceeded the provisions of the law in dealing with the companies’ applications. He further stated that any regulatory action concerning the import licences that failed to comply with the PIA and other applicable laws would be null and void.

The three marketers had approached the court seeking declarations that the PIA does not prohibit petroleum product imports or prevent the NMDPRA from granting and renewing licences for qualified importers.

They also argued that the regulator had a statutory responsibility to promote competition within Nigeria’s midstream and downstream petroleum sectors.

Justice Ekwo upheld their position, finding that relevant provisions of the PIA, alongside Section 72 of the Federal Competition and Consumer Protection Act, require the NMDPRA to promote competition and guard against dominant market positions and restrictive business practices.

The court therefore declared that the three companies were entitled to the issuance, extension and renewal of import licences, provided they met all applicable regulatory requirements.

The order specifically directed the regulator to continue granting, issuing, extending, renewing or reissuing licences and authorisations for midstream and downstream petroleum operations, including petroleum product imports.

The ruling remains subject to the companies satisfying all statutory and regulatory conditions.

In an affidavit filed before the court, the Executive Director of A.A. Rano Nigeria Limited, Sabiu Saidu Mahuta, alleged that the NMDPRA had issued or renewed the companies’ import licences only intermittently since July 2025.

He claimed that the situation had contributed to market concentration in favour of local refineries. The companies also told the court that they had invested more than $20bn collectively in infrastructure, logistics and retail networks.

Their counsel, Raji Ahmed, SAN, argued that maintaining access to both imported and locally refined petroleum products would promote competition, discourage monopoly and price-fixing, and strengthen the downstream sector.

The Abuja judgment comes as the Dangote refinery continues its separate legal challenge against petroleum product import licences issued to the NNPC and other marketers.

The Federal High Court in Lagos has fixed October 7 for the hearing of a suit filed by Dangote Petroleum Refinery challenging the Federal Government’s issuance of fuel import licences to NNPC and several petroleum marketers.

In the suit, marked FHC/L/CS/857/2026, Dangote is asking the court to invalidate import licences allegedly issued or renewed around May 6, 2026, in favour of NNPC and marketers including NIPCO, A.A. Rano, Matrix, Shafa, Pinnacle and Bono.

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

The existence of cases before courts of coordinate jurisdiction has added another layer to the dispute, particularly because Dangote was not a party to the Abuja proceedings and may therefore not have a direct avenue to appeal that judgment.

The NMDPRA has also 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 granted permits.

Reacting to the ruling, PETROAN National President, Billy Gillis-Harry, described the decision as beneficial to consumers, arguing that multiple supply sources could help improve petrol availability and affordability.

Gillis-Harry said the decision should not be limited to the three companies involved in the Abuja case, arguing that all qualified firms with the capacity to import and supply petroleum products should have access to licences.

He maintained that diversifying supply sources would help strengthen the availability and affordability of petroleum products.

Similarly, IPMAN National Publicity Secretary, Chinedu Ukadike, said the judgment should be respected, adding that marketers would continue to source products based on price and availability.

Ukadike said marketers would purchase from domestic refineries when their products were competitively priced, while also considering imports where they offered better prices.

He said the priority for marketers was to obtain petroleum products at competitive prices and ensure continuous supply to consumers.

A major petroleum marketer, who spoke anonymously because of the sensitivity of the matter, expressed concern over the emergence of disputes before courts of coordinate jurisdiction.

The marketer questioned the growing reliance on litigation to resolve disagreements within the midstream and downstream petroleum industry, noting that different courts could potentially issue conflicting decisions.

However, IPMAN Vice President, Hammed Fashola, said approaching the courts was an appropriate way to obtain clarification on the interpretation of the Petroleum Industry Act.

Fashola urged industry operators and regulators to resolve their differences without disrupting the availability and distribution of petroleum products.

He said stakeholders had the right to seek judicial interpretation where provisions of the PIA were considered unclear or disputed, adding that any conflicting decisions could ultimately be addressed through the appellate courts.

He also urged Dangote, importers and other industry stakeholders to ensure that the legal disputes did not result in fuel shortages or disruptions to the current supply situation.

Energy sector expert Dan Kunle called for amendments to the Petroleum Industry Act, arguing that its provisions on petroleum product imports no longer adequately reflect Nigeria’s current refining landscape.

Kunle noted that the PIA was enacted before the emergence of large-scale private refining capacity such as the Dangote refinery and argued that the law should be reviewed to reflect the changing market.

He said the government should consider amending the legislation to make fuel imports discretionary and tied to specific national supply needs, rather than allowing imports to operate as a permanent market mechanism.

According to him, imports could remain available as a contingency measure during periods of domestic supply shortages.

The Crude Oil Refinery-Owners Association of Nigeria has also called for a gradual reduction in petrol imports, arguing that some domestic refineries are still struggling to obtain crude oil on commercially viable terms.

CORAN Chairman, Momoh Oyarekhua, made the call at the association’s third Nigeria Oil Refining Summit in Lagos.

Oyarekhua said Nigeria’s refining sector had made progress but maintained that challenges surrounding crude supply were limiting the utilisation of some domestic refining facilities.

He called for the full implementation of the naira-for-crude policy, transparent access to crude for qualifying domestic refineries and stronger enforcement of the Domestic Crude Supply Obligation under the PIA.

He also proposed domestic crude pricing arrangements that would take into account crude quality, delivery locations, transportation costs and other relevant factors.

On imports, Oyarekhua advocated a gradual reduction, with imported products reserved for objectively established domestic supply gaps and strategic stock requirements.

He argued that expanding domestic refining would help Nigeria retain foreign exchange, create employment, strengthen local expertise and capture more value from its crude resources.

Economist Mustafa Chike-Obi has, however, argued against giving domestic refineries unlimited protection from imported petroleum products.

Speaking on the Policy without Politics podcast with development economist Dr Ken Ikpe, the former Fidelity Bank chairman said any protection offered to local refineries should be time-bound.

Chike-Obi also questioned the continued investment in the rehabilitation of the government-owned refineries in Port Harcourt, Warri and Kaduna, arguing that their age and technology could make them less efficient than newer facilities.

He suggested that government resources should instead be directed towards more efficient refining facilities and other productive industries.

The competing positions highlight the central issue in the ongoing fuel import debate: how Nigeria balances open competition and consumer supply with the expansion and protection of domestic refining capacity under the existing petroleum regulatory framework.