The Nigeria Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) is more than busy with the task of bringing sanity to Nigeria’s troubled petroleum retail market, as the agency has suspended operations of seven tank farms within the Satellite Town neighbourhood in Lagos State.
The facilities were recently shutdown by the energy regulatory agency, but allowed trucks that were presently on ground at the facilities to load products before its operatives finally sealed up the tank farms completely.
The reason for the closure of the seven tank farms, Valuechain learnt, followed the discovery by NMDPRA that the operators of the facilities were selling Petroleum Motor Spirit (PMS), or petrol, above the ex-depot price stipulated by the regulator, thereby making the final consumers to purchase the product at above N165 per litre.
Listed among the depots affected by the recent sanctions by federal authorities are Aipec, Menj, A.A Rano, Rain Oil, Stallioniare, Wosbab, and Lado Oil, all situated at Satellite Town in Oriade Local Council Area of Lagos State.
Prior to this incident of sanction, oil marketers had given the Federal Government conditions that they said should be met in order for them to retain the pump price of petrol at N165 per litre.
But the Federal Government has said it is trying everything possible to make sure that the challenge of fuel scarcity is tackled and energy is made seamlessly available to all Nigerians. It also disclosed that N74 billion has been paid to oil marketers as bridging claims in just seven months.
NMDPRA, which is responsible for coordinating such critical interventions on behalf of the government, made the disclosure while reacting to claims by the Independent Petroleum Marketers Association Nigeria (IPMAN), Suleja Branch, that continuing fuel scarcity was caused by non-payment of bridging claims by the Federal Government.
The agency maintained that it paid N71.2 billion bridging claims and another N2.7 billion freight differentials to the marketers as of June 6, 2022. In May, IPMAN said the government owed its members half a trillion naira being the cost of transporting petrol across the country.
However, the claim was refuted by NMDPRA, insisting that at that time, it had already paid oil marketers their bridging claims of about N59 billion in a period of five months.
In a statement, the Authority wrote that: “The attention of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has been drawn to allegations made by the Independent Petroleum Marketers Association Nigeria (IPMAN Suleja Branch) on product scarcity as a result of non-payment of bridging claims.
“The Authority Chief Executive of the NMDPRA, at a meeting held on 17th May, 2022 with IPMAN, bridging payment was discussed extensively and the processes were explained and agreed upon by IPMAN.
“He assured IPMAN of NMDPRA’s willingness to continue making payments of outstanding claims to promote seamless operations.
“Pursuant to the meeting, the NMDPRA went ahead to make an additional payment of N10 billion in June and sought for an upward review of the freight rate, which was approved by President Muhammadu Buhari and is currently being implemented.
“The Authority wishes to reiterate that bridging payment is an ongoing process, which is carried out after due verification exercise by the Authority and Marketers.
“So far, the Authority paid N71,233,712,991 bridging claims and another N2,736,179,950.84 freight differentials to the Marketers as at 6th June 2022.
“A breakdown of payment made to Marketers is as follows: Major Marketers (MOMAN) received N9,958,777,487.24, IPMAN members were paid N42,301,923,616.96, NNPC Retails N6,661,459,118.61 while DAPPMAN members were paid N12,303,195,651.57, these translate to a total of N73,969,892,941.84.
“It is disheartening that despite these payments and increase of N10 bridging cost, which was approved by President Muhammadu Buhari two weeks ago, IPMAN could turn around to accuse the NMDPRA of insensitivity,” the statement said.
As fuel scarcity bites harder in Abuja and other cities across Nigeria, petroleum traders have listed the high cost of buying petrol at depots, including the high cost of diesel to truck the product, as the major factors responsible for the recent energy crunch.
The government recently announced that petroleum deliveries were up nearly 100 per cent in Abuja, after it offered additional N10 freight reimbursements to marketers.