In an effort to prevent the planned suspension of operations by the Nigerian Association of Road Transport Owners (NARTO) members, the Federal Government has ordered oil marketers to engage in negotiations with the association. NARTO had earlier declared its intention to halt the lifting of petroleum products nationwide starting today (Monday).
Sources reveal that oil marketers and NARTO executives held multiple meetings over the past two days, following the announcement of the planned suspension. The Federal Government, through the downstream regulator and the petroleum ministry, is set to meet with NARTO members and other stakeholders in Abuja on Monday to address the underlying issues.
The primary concern driving the potential disruption in fuel supply is the high operational costs faced by NARTO members. The association has repeatedly expressed worries over the escalating prices of diesel, essential for powering their trucks for petroleum product transportation across the country. Diesel prices were reported to range between N1,250 to N1,400 per litre, varying by location.
Additionally, independent marketers have voiced concerns about the continued depreciation of the naira against the United States dollar. The rising exchange rate, exceeding N1,500 lately, raises fears that the non-subsidized pump price of Premium Motor Spirit (PMS or petrol) could reach N1,500 per litre in the coming days. While the Nigerian National Petroleum Company Limited (NNPCL) has not officially acknowledged subsidizing PMS, industry experts argue that the current selling price of N600-N700 per litre implies some level of subsidy.
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.
“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.
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 outcome of the upcoming meeting between the Federal Government, oil marketers, and NARTO will be crucial in determining the resolution of the ongoing issues and preventing potential disruptions in the fuel supply chain.
