The Nigerian Association of Road Transport Owners, (NARTO) has alerted the federal government that the present shortfall in petroleum products across retail outlets in the country could be worsened except the Nigerian National Petroleum Company Limited and the Downstream, Midstream Regulatory Authority (NDMPRA) accede to its demand for upward review of freight charges.
Addressing newsmen in Abuja on Thursday, National President of NARTO, Alhaji Yusuf Lawal Othman said the present freight charges are overregulated by the Downstream, Midstream Regulatory Authority (NDMPRA) without due regard to prevailing economic and market conditions.
The NARTO President recalled that two years ago, approval by the defunct board of the Petroleum Products Pricing Regulatory Agency (PPPRA) to increase the freight rate by 26% for which the endorsement of the Hon Minister of State for Petroleum Resources was needed for implementation did not sail through because of “the fear of overall implication on the price of Premium Motor Spirit,( PMS), or lead to an increase in the subsidy on the product, neither of which the government was ready to do at the time.”
He said: “This situation generated a lot of tension in the downstream petroleum industry with a strong possibility of industrial action from both NARTO and PTD/NUPENG. To douse this tension, the Group Managing Director (GMD) of NNPC intervened by suggesting two alternatives viz.
“PPPRA to look into the possibility of accommodating an increase on the existing pricing template by reducing the share of government agencies on the template such as (a) PPPRA Funding, (b) NIMASA Charges, and (c) NPA Fees. “2. Revert to National Economic Council to inform it of the changes and the financial implication of the decision on the finances of the nation.
“Based on Presidential approval the first option was adopted by approving 10% to be implemented immediately while the balance of 16% was to be implemented based on the second option. To date, this 16% is yet to be implemented.
“Since then, unfortunately, the economic circumstance in the country have not been better.
Our operational costs keep growing up exponentially.”
Aside from the claim by the Nigerian National Petroleum Company Limited that withdrawal of contaminated fuel from circulation was responsible for the present scarcity of the products, the NARTO President attributed the situation to lack of adequate trucks to transport the products as he maintained that transporters lack the fund to run the trucks profitably.
“For the records, I should emphasize the positive contribution of trucks to the efficient distribution of petroleum products across the country, despite the occasional problems associated with them. It is on record that over 98% of petroleum products are transported by road today.
“The pipelines have not been operational for years while the railways, despite their rehabilitation, are yet to commence.
“The current PMS scarcity is partly, caused by a lack of funds to run the trucks profitably.
“Many transporters have decided to park their trucks, and I am sure that many more will park theirs in due course if something drastic about increasing the freight rate is not promptly done.
“Consequently, we would like to notify the members of the public that while we sympathize with them over the inconveniences that PMS scarcity might be causing them, we are constrained to inform them that if the situation remains unattended we would have no choice but to park our trucks because we cannot continue to operate at a loss”
Alhaji Othman also appealed to the relevant federal government agencies to expedite action on the repair of 21 federal roads to which about N621billion had since been approved by the Federal Executive Council for their urgent rehabilitation.
“Another serious problem affecting our operations is the condition of the roads, many of which are in precarious condition.
“Although we commend the federal government for the NNPC Tax Credit intervention of N621billion for the repair of 21 roads, they should speed up with the awards of the contracts and exercise extreme care in the supervision, monitoring and payment so as to ensure value for money in contract execution.
“This becomes imperative to avoid substandard or poor work execution.
“In fact, we recommend that a committee comprising of stakeholders should be set up to help in the supervision and monitoring exercise to ensure speedy completion of the work before the rainy season.”
