FG Increases The Freight Rate For Petroleum Products By 25%

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Ascon Oil
FG Increases The Freight Rate For Petroleum Products By 25%

The Federal Government has enacted a 25% increase in the freight rate for petroleum products, raising it from N9.5 per litre to N11.87/litre, according to Alhaji Yusuf Othman, National President of the Nigerian Association of Road Transport Owners (NARTO).

Alhaji Othman, who revealed this at NARTO’s 22nd Annual General Meeting in Abuja yesterday, lamented that the benefit of the increase had been wiped out by the increase in diesel prices to N635 per litre.

He stated that because of the rise in diesel prices caused by Russia’s invasion of Ukraine, the group may have to go back to the Federal Government for another review.

He stated that “the price of diesel is having an impact on our business, not only on us, but on all activities in Nigeria.” This is because, as of today, fuel is imported into Nigeria at the international price, and everyone in Nigeria is aware that the international price is now influenced by the current conflict between Ukraine and Russia.”

While thanking the government for approving the increase, he stated that “the increase would not have been noticed because of the price of diesel, but we know that this is temporary due to the war.” As a result, we are confident that the increase will have an impact on our business in the near future. But if things continue to deteriorate as they are, we will be forced to return to the government.”

He stated that NARTO was in talks with tanker divers about raising their pay and allowances in order to create a good working environment in the sector.

He acknowledged that NARTO members were operating in a challenging business environment in the country.

“We are aware of the difficult conditions under which our members work. We are doing everything we can to alleviate these difficulties. To that end, I am pleased to inform you that the government has approved a 25% increase in freight rates. Though this is insufficient, it is the best we can do under the current PMS (premium motor spirit) Pricing Template of N165 per litre.

“Bad roads have remained a stumbling block to the safe and efficient movement of goods, services, and passengers across the country.” Many reports have come in of critical delivery deadlines being missed, vehicles breaking down, and accidents occurring across the country as a result of poor road conditions.”

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Aside from the transportation of petroleum products, Alhaji Othman stated that NARTO members successfully freighted 2,000 tons of fertilizers in 2020 from Lagos to various parts of the country, 14,000 tons of wheat seeds in 2021 from Lagos to various parts of the country, and 41,431.60 tons of fertilizers in 2022 from Port Harcourt to various parts of the country in the previous year with the collaboration of the Central Bank of Nigeria (CBN).

He expressed satisfaction with the level of N621 billion NNPC Limited road intervention fund implementation, emphasizing that work on the designated roads has progressed well.

Earlier, the Minister of Works and Housing, Babatunde Fashola, assured road transport owners that the government was working hard to get the roads in good shape before the rainy season began.

Farouk Ahmed, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stated, “The Authority is not unaware of the various challenges currently confronting the Petroleum Industry, particularly with regard to Petroleum Products haulage and transportation, and we believe they are surmountable with dedication and selfless services from all key stakeholders.”

Mr. Ahmed was represented by Ogbugo Ukoha, Executive Director, Distributions System, Storage, and Retail Infrastructure.