With regard to how Iblees will be punished with fire when he is created from fire, the answer is:
The fact that the jinn were created from fire does not necessarily mean that they are fire now, just as man was created from dust but he is not dust now.
Abu’l-Wafa’ ibn Aqeel said:
The devils and jinn are attributed to fire just as man is attributed to dust, clay and baked clay. What is meant in the case of man is that he originates from clay, but a human being is not clay in a real sense, rather he used to be clay. Similarly the jinn were fire in the beginning. End quote.
Laqt al-Marjaan fi Ahkaam al-Jaan, p. 33, quoted in ‘Aalim al-Jinn wa’l-Shayaateen, p. 58.
Although man was created from clay, a little of it will harm him; if he is buried beneath it he will die, and if he is struck with it (such as with baked clay), he will be wounded or will die. So it not strange to think that although the jinn were created from fire, they will be punished with the Fire of Hell.
Allaah created the jinn from fire, but they are not fire now. There is a great deal of evidence to that effect, such as the following:
1 – It was narrated from ‘Aa’ishah that the Messenger of Allaah (peace and blessings of Allaah be upon him) was praying, then the Shaytaan came to him and he seized him, threw him to the ground and strangled him. The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “Until I felt the coolness of his tongue on my hand. Were it not for the prayer of my brother Sulaymaan, he would have been tied up this morning so that the people could see him.” Narrated by al-Nasaa’i in al-Sunan al-Kubra, 6/442; classed as saheeh by Ibn Hibbaan, 6/115
2 – It was narrated that Abu’l-Darda’ said: The Messenger of Allaah (peace and blessings of Allaah be upon him) stood (in prayer) and we heard him say: “I seek refuge with Allaah from you.” Then he said: “I curse you with the curse of Allaah,” three times, and he reached out his hand as if to take something. When he had finished praying, we said: “O Messenger of Allaah, we heard you say something in your prayer that we have never heard you say before, and we saw you reaching out your hand.” He said: “The enemy of Allaah Iblees came with a brand of fire to throw it in my face, so I said, ‘I seek refuge with Allaah from you,’ three times, then I said: ‘I curse you with the full curse of Allaah,’ but he did not go back, three times. Then I wanted to seize him, and by Allaah, were it not for the prayer of our brother Sulaymaan, this morning he would have been tied up and the children of the people of Madeenah would have played with him.” Narrated by Muslim, 542.
From these two hadeeths it is clear to us that the jinn are not fire now. This is indicated by the coolness that the Messenger of Allaah (peace and blessings of Allaah be upon him) felt from the tongue of the Shaytaan, as stated in the first hadeeth. If the Shaytaan was still in the form of fire, he would not have needed to bring a brand of fire to throw in the face of the Prophet (peace and blessings of Allaah be upon him), and the children would not have been able to play with him.
3 – The Prophet (peace and blessings of Allaah be upon him) said: “The Shaytaan flows through the son of Adam as blood flows.” Narrated by al-Bukhaari (1933) and Muslim (2175).
If the Shaytaan was fire, he would burn man, because the Shaytaan is inside him. So we can see the difference between the Shaytaan being fire and being created from fire.
If the Shaytaan were fire now – for the sake of argument – and Allaah wanted to punish him with the Fire of Hell, then Allaah is Able to do all things, and He is not incapable of anything, may He be glorified and exalted.
And Allaah knows best.