Court Halts NMDPRA's Dangote Refinery Order; Agency Weighs Legal Options

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is currently strategizing its approach to safeguard its oversight responsibilities concerning midstream and downstream enterprises operating within free trade zones. This development follows a recent interim injunction issued by a Federal High Court in Lagos, which prevents the NMDPRA from disrupting or ceasing the activities of the Dangote Petroleum Refinery situated in the Lekki Free Zone, Lagos.

Justice Akintayo Aluko delivered this ruling on an ex parte motion, referenced FHC/L/CS/1174/26, which was presented and argued by the legal team representing Dangote Petroleum Refinery Nigeria Limited, headed by Olawale Akoni and Abimbola Akeredolu. The refinery initiated the court action after receiving a communication from the NMDPRA, dated August 24, 2026, which reportedly instructed the halt of petroleum product loading and distribution from its facility.

During his judgment, Justice Aluko affirmed that he had thoroughly reviewed the application, accompanying affidavit evidence, submitted exhibits, and arguments from both counsels, including the specific letter from the NMDPRA. The judge highlighted that the refinery's central argument was that the NMDPRA does not possess the mandate for regulatory or oversight functions over activities within free zones, explicitly mentioning the Dangote Industrial Free Zone.

Furthermore, Justice Aluko referenced a letter from the Attorney-General of the Federation, dated March 2, 2026, which, as per the judge, clarified that the NMDPRA is not authorized to exert regulatory powers or supervisory roles over operations situated within free zones. The judge concluded that the refinery had fulfilled the necessary criteria for an interim injunction to be granted. Justice Aluko declared, "Accordingly, I find merit in the application, and the same is hereby granted in terms of the reliefs sought."

When approached for comments, George Ene-Ita, the NMDPRA spokesman, refrained from discussing the issue, stating, "I can’t comment on a case before the court." Although he did not refute the existence of the NMDPRA's letter instructing the shutdown of the Dangote refinery, Ene-Ita declined to elaborate on the reasons behind the regulator's directive to halt loading. Nevertheless, sources among senior NMDPRA officials indicated that the regulatory body is currently evaluating its subsequent steps regarding both the ongoing legal case and the court's recent decision. Information suggests that the agency's legal department and leadership are set to "decide the next line of action."

It is worth noting that in May, the NMDPRA had previously asserted that all petroleum firms operating within Nigeria's free zones, export processing zones, and other specified regions are entirely bound by the stipulations of the Petroleum Industry Act (PIA) 2021 and its subsidiary regulations. This position was communicated by the regulator via an industry circular.

Free zones are specific geographical areas established by the government with the aim of fostering investment and industrial growth. These zones offer various benefits such as tax incentives, customs duty waivers, and streamlined business regulations. Examples include export processing zones, industrial parks, and special economic zones, where businesses typically benefit from relief from certain taxes and administrative protocols. Despite these incentives, the NMDPRA has consistently maintained that they do not grant oil and gas operators immunity from the petroleum sector regulations outlined in the PIA. The authority explicitly stated, "The operation of any midstream or downstream petroleum facility within a free zone, export processing zone or similar area does not exempt such facility and its operations from compliance with the provisions of the PIA and regulations made thereunder."

In its circular, which was directed to managing directors and chief executives of various entities including oil and gas midstream companies, downstream firms, petrochemical and fertilizer companies, alongside import and export terminals, the NMDPRA reiterated its legal mandate over all midstream and downstream petroleum operations across Nigeria. The agency clarified that its regulatory scope encompasses all midstream and downstream petroleum activities, applying uniformly throughout the Nigerian territory. This includes areas such as the continental shelf, territorial waters, the exclusive economic zone, free zones, export processing zones, industrial zones, and any other specially designated regions. The NMDPRA asserted its role as the statutory body responsible for technical, commercial, operational, and licensing regulation across all midstream and downstream petroleum operations within Nigeria. Operators were informed that the authority's regulatory oversight covers a wide array of midstream and downstream petroleum activities. These include, but are not limited to, refining, processing, storage, bulk transportation, pipelines, gas transportation networks, terminals, jetties, wholesale supply, importation, exportation, distribution, and the sale of natural gas and petroleum liquids.

Given this recent court decision, the NMDPRA is now poised to advocate for its jurisdiction over free zones as the judiciary proceeds to determine the extent of its powers in such areas. In its original filing, the Dangote refinery sought a court order to prevent the regulator, its officials, agents, representatives, associates, or any individual acting on its behalf from [the original article was truncated here].