NMDPRA Issues Oil Licences To NNPC, Oil Marketers To Address Petroleum Shortfalls

Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Sunday said that it issued oil licenses to the Nigerian National Petroleum Company Limited (NNPC Ltd) and oil marketers to help solve the country's petroleum product shortages.

NMDPRA explained this in a counter affidavit filed by Idris Musa, a senior officer at the agency, in response to a lawsuit filed by Dangote Refinery and Petrochemicals FZE.

In the case numbered FHC/ABJ/CS/1324/2024, Dangote Refinery had earlier asked the court to award N100 billion in damages against the NMDPRA for issuing import licenses to certain marketers and allowing the importation of petroleum products, Premium Times reported.

The marketers involved are NNPC Ltd, Matrix Petroleum Services Limited, AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, and 2015 Petroleum Limited.

Dangote Refinery argued in court last year that import licenses should only be given when there is a shortage of petroleum products. The refinery also asked the court to declare that the NMDPRA failed in its responsibilities by not supporting local refineries.

In their response, filed on Nov. 5 last year and signed by Ahmed Raji (SAN), the marketers asked the court to dismiss Dangote Refinery's claims. They argued that competitive practices are crucial for Nigeria's economy and the oil sector's success.

They also stated that they are fully qualified to receive an import license from NMDPRA under Section 317(9) of the PIA. In an application filed on Dec. 13 last year, the NMDPRA stated that Dangote Refinery's current production is not yet enough to meet the country's daily demand for petroleum products.

In response, Musa explained that, in line with Section 317(9) of the Petroleum Industry Act (PIA), the NMDPRA issued licenses to import petroleum products to companies with strong records in international product trading to address product shortages.

He argued that Dangote Refinery is not entitled to the reliefs it seeks, emphasizing that NMDPRA's role is to ensure a vibrant petroleum sector in line with international standards, maintain national energy security, and prevent market abuses like monopolies.

Musa added that NMDPRA supports local refineries to optimize their capacity and ensure energy security. As of July 2024, there are four functional licensed modular refineries, along with four NNPC-owned refineries undergoing maintenance.

NMDPRA continues to monitor local refining progress to meet the country's daily petroleum product needs. The agency also works to promote competition and prevent unhealthy market dominance.

The import volumes allocated to licensed importers are based on factors like refining output, customer share, competitive pricing, and reliable supply and distribution records.