The Energy Watchdog has warned that continued importation of petroleum products could undermine Nigeria’s domestic refining industry, as it backed Dangote Petroleum Refinery and Petrochemicals’ move to challenge a Federal High Court judgment on fuel import licences.

The group, in a statement signed by Engr. Martins Tayo, urged the Court of Appeal to grant the refinery leave to appeal the September 28 judgment directing the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to continue issuing petroleum product import licences to Matrix Energy, AA Rano and AYM Shafa.

It argued that the ruling could weaken investments in local refining, erode investor confidence and prolong Nigeria’s dependence on imported petroleum products despite growing domestic refining capacity.

The judgment, delivered by Justice Inyang E. Ekwo in Suit No. FHC/ABJ/CS/1363/2026, followed a suit by the three oil marketers over the issuance and renewal of their import licences.

The Energy Watchdog faulted the decision, arguing that it failed to adequately consider the national interest in developing a sustainable domestic refining industry and reducing dependence on imported fuel.

“We completely reject and condemn in totality the judgment of the lower court. It is a deeply flawed decision that disregards the clear intent of the Petroleum Industry Act and the national interest in building a robust domestic refining industry,” Tayo said.

The organisation cited a reported decline in petrol imports during the first quarter of 2026, alongside increased supplies from local refineries, particularly the Dangote facility, as evidence of Nigeria’s expanding domestic refining capacity.

It maintained that the country’s growing capacity to refine petroleum products locally should inform regulatory decisions on imports, warning that continued reliance on foreign supplies could undermine efforts to achieve greater self-sufficiency.

The group also expressed concern that the judgment could send the wrong signal to investors who had committed substantial resources to establishing and expanding domestic refining facilities.

According to the organisation, the Petroleum Industry Act (PIA) was designed to encourage investment in midstream and downstream infrastructure and support the development of a sustainable petroleum industry.

It argued that the continued issuance of import licences, without sufficient consideration of domestic production, could weaken incentives for further investment in local refining.

“The lower court’s decision amounts to a judicial endorsement of continued importation irrespective of local capacity. We condemn it without reservation because it threatens to reverse the hard-won gains of the last few years,” Tayo said.

The dispute has renewed debate over the balance between protecting domestic refining investments and maintaining competition in Nigeria’s downstream petroleum market.

While the Energy Watchdog maintained that increased local production should reduce the country’s reliance on imported fuel, the legal dispute centres on the rights of petroleum marketers to obtain import licences under the existing regulatory framework.

The Federal High Court’s judgment directed the NMDPRA to continue granting the licences to the three marketers in accordance with applicable laws. The Energy Watchdog, however, argued that the decision could have wider implications for the development of Nigeria’s refining industry.

The group described Dangote Refinery’s decision to seek leave to appeal as timely, given the potential consequences of the ruling for domestic production, energy security and investment in the downstream sector.

It urged the Court of Appeal to grant the application and ultimately set aside the lower court’s order.

“Any judgment that forces the continued importation of fuel products when local refineries can supply the market is a setback for Nigeria.

“We condemn the lower court ruling in the strongest terms and fully support the appeal filed by Dangote Refinery,” the statement said.

“The Court of Appeal must correct this error and reaffirm that the era of automatic import licences is over,” it added.

Dangote Refinery’s application seeks permission to challenge the judgment as an interested party. The Court of Appeal’s decision on the application will determine whether the refinery can proceed with the appeal. The lower court’s judgment remains in force unless it is set aside or varied by a competent court.