Business & Economy - News - Oil & Gas - June 30, 2022

Alleged non-payment of bridging claims to fuel marketers by IPMAN misleading, says NMDPRA

Says N74 billion to marketers in 7 months

By Bassey Udo

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says allegations by the Independent Petroleum Marketers Association Nigeria (IPMAN) that the intermittent scarcity of petroleum products in Abuja and other major cities in the country was as a result of non-payment of outstanding bridging claims to fuel marketers was misleading.

Recently, the Suleja Branch of IPMAN blamed the long queues of anxious motorists at filling stations across the country, especially the Federal Capital Territory and environs, as a result of petroleum products scarcity, on non-payment of bridging claims to fuel marketers by the downstream petroleum industry regulatory authority.

But the NMDPRA Chief Executive, Farouk Ahmed, debunked the claims by the independent marketers, saying at least N74 billion out of the total outstanding claims have been paid to the Marketers over the last seven months.

Ahmed gave the details of the payments on Thursday in a statement in Abuja.

He said so far, the Authority paid about N71.234 billion as bridging claims, apart from another N2. 74 billion as freight charges claims differentials to the Marketers as at June 6, 2022.

A breakdown of payments the CEO disclosed, included N9.96 billion to members of the Major Oil Marketers Association of Nigeria (MOMAN), while their IPMAN counterparts received N42. 302 billion, and Nigerian National Petroleum Company Limited (NNPC) Retails got N6.662 billion.

Again, Ahmed said the Depot and Petroleum Products MARKETERS Association of Nigeria (DAPPMAN) members were paid N12.303 billion, to bring the total payment to the Marketers by the NMDPRA to about N73. 97 billion.

Giving further clarification on the issue, Ahmed said during a meeting the management of the agenda held held with IPMAN on May 17, 2022, where the issue of payment of bridging claims was extensively discussed, he explained to them the processes involved.

During the meeting, he said the marketers agreed with his explanation that payment of bridging claims to fuel marketers was an ongoing process carried out after due verification claims by the marketers by the relevant government agencies and the Authority.

Based on the agreement and assurances by IPMAN, coupled with NMDPRA’s willingness to continue making payment of outstanding claims a priority going forward, to promote seamless operations in the industry, Ahmed said, an additional payment of N10 billion was made to the Marketers in June.

Regardless, he said the marketers still went ahead to demand for an upward review of the freight rate, a request that was approved by President Muhammadu Buhari as a demonstration of good faith, to ensure the continued stability of the fuel supply system in the country.

The new freight rate, which is currently being implemented, was approved on June 16, 2022, was for an additional N10 per kilometer to be paid to the petroleum products transporters to ease their cost of transporting products.

The approval came barely three months since the Federal Government approved a 25 percent upward review of freight rate for petroleum products in the country last March.

Prior to approval, the Nigerian Association of Road Transport Owners (NARTO) had requested the Federal Government to approve the hike in the freight rate from N9.50 per kilometre to N10.56 per kilometre.

With the latest review, Ahmed said the transporters entitled receive about N20.56 per kilometre under the current Petroleum products pricing template in the country.

However, the NMDPRA Chief said it was disheartening that despite these payments and the approval of an increase of N10 bridging cost by President Muhammadu Buhari, IPMAN could turn around to accuse the NMDPRA of insensitivity.

He reminded the Marketers about the due process involved in the payment of the outstanding bridging claims and reiterated that NMDPRA remained committed to ensuring a safe, efficient, and effective conduct of midstream and downstream petroleum operations to guarantee uninterrupted distribution and supply of petroleum products in the country.

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