On September 6, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) announced it had paid oil marketers and haulage firms bridging claims worth N103 billion, between December 2021 and August 2022.
That was in direct response to the northern wing of the Independent Petroleum Marketers of Nigeria (IPMAN), dubbed the Northern Independent Petroleum Marketers Forum (NIPMF). NIPMF claimed it was being owed more than N70 billion since 2019; and because negotiations had broken down with NMDPRA, it was launching a three-day “warning strike” from September 5.
If by September 7 the issue was still unresolved, the NIPMF threatened to go on an indefinite strike that could see the coming back of petrol queues in filling stations in Abuja, the Federal Capital Territory (FCT) and nine northern states.
Indeed, to show the IPMAN resolve, Alhaji Yahaya Alhassan, its zonal chairman, led the media to its Suleja depot in Niger State, where he showed journalists tankers laden with products but whose drivers were sworn to not leaving the depot until the claims were settled. Around that time, the Borno IPMAN announced its tanker drivers were staying off the road, in obedience to the NIPMF directive.
The Suleja depot feeds the FCT, Kaduna, Nasarawa, Kogi and Niger, among other northern states.
Faced with the spectre of another petroleum crisis — not because of product shortage but for claims over haulage logistics — NMDPRA moved fast to engage NIPMF. At that parley, and with NNPC Ltd also in attendance, between September 5 and 6, the regulator announced the N103 billion disbursement to IPMAN, over a nine-month period. That clearly negated NIPMF’s claim that it was owed some N50.5 billion since 2019.
“The authority would like to reiterate that payment of bridging claims is an ongoing process and payments are disbursed as (it is) received from marketers,” the NMDPRA release stated. “It should be noted that the authority has disbursed a total of N103, 037, 922. 91 between December 2021 and August 2022.”
It also pledged itself to prompt treatment of any future claims: “Following the extensive deliberations between the parties, the authority further commits to fast-track the settlement of all outstanding claims when received from marketers after due verification and reconciliation.”
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Then, the NMDPRA final claim, though yet to be corroborated by IPMAN as at press time, which nevertheless suggested IPMAN might have let go of the strike: “NIPMF has agreed to work with the NMDPRA to ensure the free flow of products nationwide.”
By its seeming prompt resolution of the problem, NMDPRA deserves due praise. But for that, a part of the country would well have now been paralysed by another petroleum product supply gridlock. Yet, it is fair and legitimate to ask where such dispute resolution skills were before things melted down to a warning strike?
Routine and mutual distrust would appear the culprit here. In the heat of the moment, wild claims came from both NMDPRA and IPMAN.
NMDPRA’s opening gambit was that it had settled all claims; and that those claiming non-payments were suspect claimants, whose claims were either yet to be reconciled or could never be reconciled. That has not been backed by NMDPRA’s own conciliatory though pragmatic release that claims, reconciliation and actual settlement take quite some time — but that it now commits to making that time lag as short as possible.
But NIPMF itself outed with an even more outrageous claim, which the NMDPRA released facts and figures, for between December 2021 and August 2022, completely shot down — that the regulatory authority had not treated its members’ haulage claims since 2019. That is utterly scandalous, since a respectable business cartel should not be caught out making flippant and frivolous claims, no matter the heat of the moment.
Indeed, IPMAN members often take bank loans on which they pay huge interests, in advance of their claims, just to keep their business afloat. That is hugely understandable. But even that should not excuse gross hyperboles, just to push market panic, to justify a warning strike.
Still, it is expected both sides have learnt the right lessons. If the NMDPRA religiously follows its new template of transparency and prompt claim settlements, and IPMAN adopts the right temper of factoring in the time lag between claims, accounting reconciliation and settlement, the downstream marketing and supply sector could well be set for calm and lasting operational peace.
The economy demands no less, for oil and gas is central to the Nigerian local economy.