Nigeria Moves to Avert Fuel Crisis with Pledge to Settle IPMAN’s N100bn Bridging Claims, But It Reignites Subsidy Debate

Nigeria’s fuel subsidy debate has resurfaced with renewed intensity following the Federal Government’s last-minute intervention to prevent an imminent strike by the Independent Petroleum Marketers Association of Nigeria (IPMAN).

The crisis was triggered by the government’s failure to pay N100 billion in outstanding bridging claims, a situation that threatened to disrupt fuel supply across the country. While the government’s pledge to settle the debt has temporarily diffused tensions, it has also drawn fresh scrutiny over whether the fuel subsidy—officially declared abolished in May 2023—has actually been removed or merely continued under a different name.

The controversy erupted when IPMAN issued a seven-day ultimatum on February 24, 2025, demanding that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) settle the long-overdue bridging claims owed to petroleum marketers. The association warned that failure to make the payment would result in a nationwide shutdown of petrol supply, an action that could have plunged the country into yet another fuel scarcity crisis.

As the deadline loomed, the government moved swiftly to de-escalate the situation. On February 27, 2025, IPMAN’s National President, Alhaji Abubakar Maigandi, announced that the government had assured marketers of payment and expressed commitment to resolving other outstanding issues in the sector. He called on members to remain patient and suspend any planned industrial action while discussions with the NMDPRA continued.

”We have been in communication with the NMDPRA and the Federal Ministry of Petroleum Resources. They have expressed their commitment to addressing these pending claims and other issues.

”In the meantime, we kindly implore all members to remain calm and patient as we work towards securing the necessary approvals and payments.

”We understand the importance of these claims to you and appreciate your understanding during this process.

”We also encourage all members to refrain from any actions that may disrupt our collective efforts, including strike actions.

”Our upcoming official meeting with the NMDPRA will be a critical opportunity to discuss these matters further, and your participation will be invaluable,” he said.

However, the episode has raised deeper concerns about the true status of Nigeria’s fuel subsidy policy. The very existence of unpaid bridging claims suggests that the government is still subsidizing fuel distribution, contradicting its earlier stance that subsidy payments had been completely abolished.

The Subsidy Removal Controversy

When President Bola Ahmed Tinubu assumed office in May 2023, he announced an immediate and total removal of the fuel subsidy, a longstanding policy that had drained government finances and fostered inefficiencies in the oil sector. The move was widely seen as a bold economic reform aimed at reducing public spending and attracting private-sector investments in fuel importation and refining.

However, the decision came with severe economic consequences. Fuel prices tripled overnight, soaring from N185 per liter to over N500, and later surpassing N600 per liter in several states. The sharp increase led to an inflationary spiral, with the cost of transportation, food, and essential goods skyrocketing. Public frustration mounted, and labor unions staged multiple protests, arguing that the policy had pushed millions of Nigerians deeper into poverty.

As pressure intensified, the government introduced palliatives to cushion the impact, including cash transfers to vulnerable households and salary adjustments for civil servants. However, these interventions failed to prevent widespread economic hardship. Amid growing discontent, the government quietly resumed fuel subsidies under a different guise, despite insisting publicly that the subsidy regime had ended.

Subsidies Disguised as “Price Stabilization”

Although fuel prices were expected to fluctuate with global crude oil prices and exchange rate movements following subsidy removal, this has not been the case. Analysts noted that despite the naira’s depreciation and rising international crude prices, petrol prices in Nigeria remained artificially low—a clear indication that the government was still subsidizing fuel behind the scenes.

The clearest evidence of this came from the Nigerian National Petroleum Company Limited (NNPCL), which retained control over fuel imports even after subsidy removal. By early 2024, experts estimated that without any subsidy, the actual market price of petrol should have been over N1,000 per liter. Yet, the government ensured that prices remained within the N600 to N700 range, effectively covering the cost difference—just as it did during the official subsidy era.

The N100 billion bridging claims owed to IPMAN further confirm the continued existence of subsidies. Bridging claims are transportation subsidies meant to equalize fuel prices across different regions, ensuring that consumers in remote areas pay the same price as those in urban centers. If the government had truly eliminated the subsidy, there would be no reason to maintain these payments. Yet, as this crisis has shown, the government remains indebted to marketers, proving that fuel prices are still being manipulated through indirect subsidies.