A Federal High Court in Abuja has ordered the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to continue granting petroleum products import licenses to three major oil marketers: Matrix Energy, AA Rano, and AYM Shafa. The court ruled that the NMDPRA's refusal to issue licenses was in direct non-compliance with the Petroleum Industry Act (PIA). The case was brought by the three oil marketers, who sought a declaration that the PIA does not prohibit the importation of petroleum products into Nigeria.
The court's judgment, delivered by Justice Inyang Ekwo, held that the NMDPRA's actions were beyond the provisions of the law. The judge found that the consequence of non-compliance with the PIA and relevant laws makes any exercise by the authority in respect of import licenses null and void. The plaintiffs' lead counsel, Dr. Ahmed Raji, SAN, argued that the PIA does not outlaw or ban the importation of petroleum products into Nigeria, nor does it preclude or prohibit the NMDPRA from granting licenses to eligible importers.
The court declared that Sections 31(a), (d), and (l), Section 32(l), (s), (c), (u), (aa), (ii), and (jj), and Section 211 of the Petroleum Industry Act, 2021, read together with Section 72 of the Federal Competition and Consumer Protection Act (FCCPA), obligate the NMDPRA to promote a competitive market for midstream and downstream petroleum operations. The judge also declared that the plaintiffs are entitled to the issuance, grant, extension, or renewal of import licenses upon fulfilling the conditions stipulated by the NMDPRA.
Industry operators have kicked against the continued importation of petrol, following the court's order. The operators argue that the importation of petrol is not in the best interest of the country, as it may undermine the growth of the local petroleum industry. However, the court's order has been seen as a boost to the three oil marketers, who can now continue to import petroleum products into the country.
The Petroleum Industry Act, 2021, has been a subject of controversy, with some stakeholders arguing that it does not provide for the importation of petroleum products. However, the court's judgment has clarified that the Act does not prohibit the importation of petroleum products, but rather regulates the midstream and downstream operations of the petroleum industry.
The NMDPRA has been directed to continue granting, issuing, extending, renewing, or reissuing all licenses, permits, and authorizations for midstream and downstream operations, particularly those relating to the importation of petroleum products, to the three oil marketers. The court's order is expected to have significant implications for the Nigerian petroleum industry, as it may lead to increased competition and a more liberalized market.
The judgment has also raised questions about the role of the NMDPRA in regulating the petroleum industry. The authority has been criticized for its refusal to issue import licenses to the three oil marketers, which was seen as an attempt to restrict competition in the industry. The court's order has been welcomed by the plaintiffs, who have been seeking to import petroleum products into the country.
Key points
- The court's order is a significant development in the Nigerian petroleum industry, as it may lead to increased competition and a more liberalized market.
- The judgment has clarified that the Petroleum Industry Act, 2021, does not prohibit the importation of petroleum products, but rather regulates the midstream and downstream operations of the petroleum industry.
- The NMDPRA has been directed to continue granting import licenses to the three oil marketers, Matrix Energy, AA Rano, and AYM Shafa.
