The Federal Government has ordered oil marketers to negotiate with the Nigerian Association of Road Transport Owners to avert the planned suspension of operations by NARTO members with respect to the lifting of petroleum products nationwide beginning today (Monday).
It was gathered on Sunday that oil marketers and the executives of NARTO met about six times in the last two days, following the declaration of the petroleum products’ transporters to halt operations.
Our correspondent further gathered that the Federal Government through the downstream regulator and the petroleum ministry would meet with NARTO members, as well as other parties today (Monday) in Abuja to sort out the issues.
This came as independent marketers expressed worry over the continued crash of the naira against the United States dollar, as they stressed that the development could force the non-subsidised pump price of Premium Motor Spirit, popularly called petrol, to hit N1,500/litre in coming days.
The dollar has been on the rise, hitting over N1,500 lately. Nigeria, through the Nigerian National Petroleum Company Limited, is still importing petrol basically with the dollar. Although NNPCL has kept mute on subsidy, marketers said PMS was being subsidised, otherwise it would sell for about N1,500/litre not N600-N700/litre as sold currently.
On Friday, it was reported that Nigeria might witness another round of fuel scarcity as NARTO had vowed to stop lifting petroleum products beginning today (Monday) due to the high cost of operations.
NARTO members have repeatedly raised concern over the high cost of diesel required to power their trucks for the transportation of petroleum products across the country.
Oil marketers had told our correspondent on Thursday that diesel prices were between N1,250 to N1,400/litre depending on the area of purchase.
NARTO’s President, Yusuf Othman, had in a statement he issued in Abuja on Thursday, said the statement was an official announcement from the association’s headquarters that members of the group would park their trucks from Monday.
“Why? It is because what we spend on operations is more than what we get in total, both in local and bridging,” he stated.
But when contacted on Sunday to confirm if the group would still proceed with its plan, Othman said NARTO and oil marketers had been meeting since Saturday based on the orders of the Federal Government.
“We are discussing with the marketers and they have proposed some increase in the transportation arrangement, and right now we are discussing with our executives with a view to consider the matter.
“But you know this has nothing to do with the government because the government no longer has a hand in the payment of transportation for products. It is purely for marketers that we provide the services to,” he stated.
When told that NARTO had earlier stated in its statement that it wrote to the petroleum minister, Department of State Services and other agencies of the Federal Government agencies on the matter, Othman affirmed this but stressed that the letters were just to alert the government to intervene.
“Yes, it was for them to intervene, not that they should pay, at least for them to see reasons why they need to talk to the other parties because the government naturally has to be an arbiter.
“In a free market, the government cannot just fold its arms and say everybody should do whatever they like. And this is the time we are oppressed downstream because most of the marketers have increased their pump prices but they have not increased our freight rates.
“So since the time we issued the letters, we’ve met with the marketers about four to five times and we are meeting later this (Sunday) evening. And I do hope we will be able to conclude before Monday, otherwise, we will withdraw our services.
“It is not a strike, because we are not employees, we are business people, we will just withdraw our services. But I don’t want to believe that it will not be resolved before then because everybody is aware of their responsibilities,” the NARTO president stated.
On whether NARTO was getting the desired response from marketers, Othman replied, “We’ve met almost six times. Today (Sunday) we met three times, yesterday (Saturday) we met three times and we are going to meet again later this (Sunday) evening.
“The government has directed them that they must negotiate with us, because they have seen reasons why we have to get some improvement in our freight rates, in view of the high operational cost. So there is hope.”
Othman had explained last week that NARTO members were operating at a loss and it was no longer sustainable for them to endure the losses.
“We will have to suspend operations, latest from Monday. We cannot continue to operate at a loss. Most people have parked. A lot more are going to the park. But from the point of the association itself, we are going to suspend operations on Monday,” he stated.
He had stated that NARTO’s efforts to get the intervention of key stakeholders, the Federal Government and industry operators had not yielded positive results.
According to him, the association had written letters on the unbearable cost of operations to the Chief of Staff to President Bola Tinubu; Minister of Petroleum Resources; Department of State Services; Nigerian Midstream and Downstream Regulatory Authority; Nigerian National Petroleum Company Limited; and oil marketers.
“We have written letters up to the level of the Chief of Staff to the President. We have written to the Minister of Petroleum Resources (Oil). We have written to the Director-General of SSS. We have written to NNPC’s boss. We have written to the NMDPRA. We have written to the major marketers,” Othman stated. He stressed that despite the letters, there has been “no response.”
Analysing the market situation, which the members had endured for several months, he stated that the same freight rate that applied when former President Muhammadu Buhari was ruling, was still subsisting.
“The Lagos to Abuja freight rate that was implemented when the dollar was N650 is still retained now that the dollar is N1,615. Everybody is aware that all our consumables in terms of operation are not produced in the country.
“So, by virtue of the rate of dollars, every consumable has increased. But the freight they are paying us has been the same since Buhari’s time. So how is that feasible? During Buhari’s time, one dollar was N650. Today, the dollar is N1,615. The average freight from Lagos to Abuja is N32,” he stated.
Othman further explained that “what I mean by local is that when you load in Lagos, you discharge in Lagos. And bridging means that when you load from Lagos, you come to Abuja. Lagos to Lagos, we are paid N120,000.
“AGO (diesel) alone to distribute fuel within Lagos is N140,000 because it is N1,400/litre. So, they give you N120,000 and you spend N140,000. So how do you want to operate? You’ve not talked about the cost of vehicles, cost of loading, driver’s allowance. That is for locals.”
He stated that the cost of moving products out of Lagos or Warri to other states was far higher than what the government was paying to tanker drivers as bridging claims.
The government pays an agreed sum to transporters of petroleum products as bridging claims in order to ensure equality in the pump prices of these products across states, though this has not been the case.
IPMAN reacts
Commenting on the development, the President, Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, said he was aware of the letters from the tanker drivers, and noted that independent oil marketers had been interfacing with NARTO members not to suspend their operations.
He said, “We are aware of their plan to suspend operations from Monday and we’ve tried to convince them otherwise, but they said they will go ahead. And you know when they suspend operations there is nothing we can do, and this will cause fuel scarcity.
“However, we are still speaking with them and hoping that the matter would be resolved in the interest of the country and everyone.”