Oil marketers refusing request to review freight rates, says NARTO

The Nigerian Association of Road Transport Owners (NARTO) says despite deregulation of the downstream sector, oil marketers have refused its request to review freight rates.

Owing to the deregulation of the downstream sector, the forces of demand and supply determine the cost at which premium motor spirit (PMS) is distributed across the country.

Deregulation removes the government’s control over the prices of petroleum products and allows private entities to make decisions in the sector.

Speaking at the 24th annual general meeting of the association in Abuja on Wednesday, Yusuf Othman, NARTO’s national president, said marketers have blamed the “government restrictions on adjusting PMS pump prices, even when international market prices for the product increase”.

“While the deregulation of the downstream petroleum sector is commendable, it has introduced a substantial challenge in determining freight rates,” Othman said.

“In a theoretically free market, freight costs should be dictated by demand and supply dynamics, with rates negotiated between marketers and transporters.

“However, achieving this has proven difficult. Despite our operational costs, particularly in forex and diesel, skyrocketing to unsustainable levels, marketers consistently refuse our requests for freight reviews.”

Othman lamented the bad roads and insecurity that has affected its operations across the country.

“The persisting issue of inadequate road infrastructure in the country remains a significant impediment to the seamless movement of people, goods, and services,” he said.

“The activities of bandits, kidnappers, and thieves have made life miserable for drivers. We have had many cases where drivers were kidnapped while on duty and some had their trucks hijacked at gunpoint along some of the critical routes in the country.

“Many drivers and their assistants have lost their lives and losses incurred from such incidents.”

On his part, Wale Afolabi, general secretary of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), said the union is proud of what NARTO has achieved.

“We are partners in progress. We are pleased in NUPENG to be in partnership with the NARTO leadership,” Afolabi said.

“We know the challenges that transporters are going through. They are the employers of our drivers. We are proud of what we have been able to achieve together.”

Also speaking, Mele Kyari, group chief executive officer of Nigerian National Petroleum Company (NNPC) Limited, said NARTO is crucial in the supply of petroleum products across the country.

Kyari, who was represented by Dapo Segun, NNPC’s executive vice president, downstream, said the national oil firm is pleased with the role of NARTO in recent times.

“I will be failing only duty if we don’t acknowledge the role you played to mitigate fuel queues,” he said.

“We see NARTO as very important stakeholders. We feel your pains, we know how difficult the terrain is especially at this time.”

Segun said so much investment has been put in Nigeria’s economy but people worry about the viability.