The Federal High Court in Abuja has ruled that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) cannot refuse to issue or renew petroleum products import licences in a manner that is inconsistent with the Petroleum Industry Act (PIA), 2021.
The judgment, delivered by Justice Inyang Ekwo, concerned three oil marketers — Matrix Energy, AA Rano and AYM Shafa — who had challenged the regulatory authority’s handling of their import licences.
What The Federal High Court Decided
Justice Ekwo held that the NMDPRA’s refusal to grant or renew the companies’ petroleum products import licences did not comply with the provisions of the PIA.
The court further ruled that actions taken by the regulatory authority concerning petroleum products import licences that do not comply with the PIA and other relevant laws would be null and void.
Justice Ekwo said the three companies had successfully established their claims against the NMDPRA and consequently ruled that the case succeeded on its merits.
Why The Oil Marketers Went To Court
The three marketers had approached the Federal High Court seeking declarations concerning the legality of petroleum products importation and the regulatory authority’s powers over import licences.
Among other things, they asked the court to declare that the PIA does not prohibit the importation of petroleum products into Nigeria.
They also sought a declaration that the NMDPRA has the power to issue or renew import licences for companies that meet the relevant requirements.
The dispute therefore centred on whether the regulatory authority’s refusal to issue or renew the licences was consistent with the legal framework governing the petroleum sector.
What Justice Ekwo Said About NMDPRA’s Powers
In delivering judgment, Justice Ekwo found that the NMDPRA had acted beyond the provisions of the law in refusing to issue or renew the licences.
The court’s position was that the regulatory authority must exercise its powers in accordance with the PIA and other applicable legislation.
Justice Ekwo also held that the relevant provisions of the PIA require the NMDPRA to promote competition within the midstream and downstream petroleum sector.
The court referred to Sections 31(a), (d), (l), 32(l), (s), (c), (u), (aa), (ii), (jj) and 211 of the PIA, read together with Section 72 of the Federal Competition and Consumer Protection Act.
How The Judgment Affects The Three Companies
Following the judgment, Matrix Energy, AA Rano and AYM Shafa were held to be entitled to the issuance, extension or renewal of their petroleum products import licences.
However, the entitlement is subject to the companies meeting the conditions set by the NMDPRA.
The judgment therefore does not remove the regulatory requirements applicable to petroleum products importation. Instead, it establishes that the authority’s decisions on the licences must comply with the relevant legal provisions.
What The Court Said About Competition
Justice Ekwo further held that the applicable provisions of the PIA and the Federal Competition and Consumer Protection Act require the NMDPRA to promote competition in the midstream and downstream petroleum industry.
The court said the regulatory framework also requires the authority to prevent the abuse of dominant positions and restrictive business practices within the sector.
The ruling consequently places emphasis on the NMDPRA exercising its regulatory responsibilities within the limits established by law.
What Happens Next
The immediate effect of the judgment, based on the information available, is that Matrix Energy, AA Rano and AYM Shafa are entitled to have their petroleum products import licence applications considered in line with the applicable legal requirements and NMDPRA conditions.
The supplied material does not state whether the NMDPRA intends to appeal the judgment or provide details of any further court proceedings.
For now, the Federal High Court’s decision establishes that the refusal to issue or renew the three companies’ import licences must be consistent with the Petroleum Industry Act and other relevant laws.
