Fuel Scarcity: FG counters IPMAN on N500 billion claim, provides payment details

The federal government has denied a claim by the Independent Petroleum Marketers Association of Nigeria (IPMAN) that the government owes its members half a trillion naira, a debt the group says could worsen the latest round of fuel scarcity in the country.

Fuel queues returned this week to some cities across the country, including the federal capital Abuja, with many residents having to buy petrol from roadside hawkers at prices as high as N400 a litre against the government-set range of between N162 and N165.

The Nigerian National Petroleum Corporation Limited (NNPC) blamed the shortage on insufficient lifting of products during last week’s long holidays. But the petroleum marketers association, IPMAN, said the shortage also had to do with the government’s indebtedness to its members.

The chairman of IPMAN, Kano State chapter, Bashir Dan-Mallam, was quoted as urging Nigerians to brace for a more severe crisis in the coming days, saying the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had failed to pay marketers “bridging claims” of over N500 billion in nine months.

The claim covers the cost of transporting petrol to the hinterland. It allows marketers who still sell government regulated rates make profits.

“Failure of the NMDPRA to pay the outstanding claims for about nine months, many marketers cannot transport the product because their funds are not being paid. Despite the high price of diesel, they manage to supply petroleum products nationwide,” he was quoted by The Cable as saying.

“The resurfacing of fuel queues in Abuja is just the tip of the iceberg with regard to the petroleum scarcity. Out of 100 per cent, only five per cent of the marketers can supply the petroleum products because of the failure of NMDPRA to pay them.”

He said since the creation of the NMDPRA as a replacement agency for the Department of Petroleum Resources, Petroleum Equalization Fund and Petroleum Pricing and Regulatory Agency, the agency had paid the marketers only twice.

“As leaders, we have to come out to say the truth because our members are suffering from the failure of the agency to pay the fund. This Petroleum Equalisation Fund is our own money we contribute to each litre,” he said. “This Agency is doing more harm than good to us. We are not agitating for a transportation fee increase, we are only clamouring for payment of our bridging claims that is over N500 billion.”

The NMDPRA told PREMIUM TIMES on Wednesday that the claims were “totally false and baseless”.

The chief executive of the agency, Farouk Ahmed, said the government was not owing IPMAN N500 billion. He said the marketers were continually paid as their claims are verified.

“It’s not true that the government owes marketers N500 billion. It’s a totally false and baseless claim,” Mr Ahmed told PREMIUM TIMES in an interview.

“Recall that in December 2021, they claimed they were being owed N50 billion. Even though that claim too was inaccurate, how has N50 billion become N500 billion in five months?

“Since December, we have been paying all categories of marketers every month, except in March when no payment was done. Between December and April, we paid out about N49 billion. And as we speak, an additional N10 billion is being disbursed to the marketers,” Mr Ahmed said.

He said by the time that ongoing payment was completed, the agency would have paid about N59 billion to marketers in five months.

“And payment to marketers is an ongoing exercise, with the filing of claims, reconciliation and verification always going on,” he said. “Although some marketers delay in coming forward to reconcile their claims. In such cases, how can we pay without reconciliation?”

Payment figures seen by PREMIUM TIMES suggest that the NMDPRA’s payments have gone to four groups of marketers, namely, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), NNPC Retail, IPMAN and major marketers.

In December 2021, the agency paid N7.2 billion to IPMAN, N2.09 billion to Majors, N1.1 billion to NNPC Retail and N1 billion to DAPPMAN.

In January, IPMAN received N4.5 billion and in February it got N13.8 billion. In April, IPMAN was paid N1.7 billion and N251.9 million in May.

As of May 9, N48.9 billion had been paid to all groups of marketers. Additional N10 billion was being processed to raise the amount to N58.9 billion.

“We want Nigerians to know that we are not owing marketers N500 billion because these kinds of claims can mislead citizens, aggravate whatever situation we are in and cause hardship for our people, especially coming from someone who ordinarily is credible,” Mr Ahmed said.

He said it is difficult to say exactly how much the government owes marketers because “it is a rolling cycle.”

“We are always processing claims, as well as verifying and reconciling them. When a claim is established, we pay. So we are always owing and paying in batches,” he said.