After Years of Agitation, Petroleum Truck Owners Get 25% Freight Increase*Lament N625 diesel price

Emmanuel Addeh in Abuja

After years of agitation, the federal government has finally approved a 25 per cent increase in the freight rate for members of the Nigerian Association of Road Transport Owners (NARTO).

Making the announcement yesterday, during the organisation’s Annual General Meeting (AGM) which held in Suleja, Niger state, President of NARTO, Mr. Yusuf Othman, however lamented that the gains of the hike may have been wiped off by the current rising price of diesel.

The transport owners stressed that NARTO made modest achievements recently, including the negotiation of a new freight rate; securing the contract for the transportation of fertilisers and wheat seeds; refurbishment and procurement of new vehicles for office use; and improvement in relations with stakeholders.

Specifically, Othman noted that during the period, the organisation in collaboration with the Central Bank of Nigeria (CBN) was able to transport 2,000 tons of fertilisers from Lagos to different parts of the country.
In addition, he explained that 14,000 tons of wheat seeds were moved in 2021 from Lagos to different parts of the country, adding that 41,431.60 tons of fertilisers as at 2022, had been transported from Port Harcourt to different parts of the country.

For years, the federal government had foot-dragged in considering an increase in petrol freight for the transport owners in order to enhance their revenues.
Othman stated that although the Ukraine/Russia war could be blamed for the current rise in diesel price, saying if it persists, the organisation may need to go back to the federal government for another raise to enable the organisation breakeven in its operations.

“As at today, the price of diesel is impacting negatively on our business, not only our business, but almost all activities in Nigeria because as at today, this fuel is imported into the country.
“And naturally, it’s usually at the international price that it is purchased, and everybody knows that that the international price is affected by the current war in Ukraine and Russia. So of course, because we import it, it’s really very costly.

“We appreciate the effort of the government for this increase, but at the same time, we appreciate the fact that the increase may not have been noticed because of the higher cause of diesel.

“But we know the cost of diesel has gone up and we know the war will not last forever. Very soon of course, we will expect things to normalise. The price will normalise, meaning that the increase will be meaningful. But in any case, if this continues to go up, we will have no option than to go back to government,” Othman stated.

He also acknowledged that there had been serious progress on the repair of roads for which the Nigerian National Petroleum Company (NNPC) Limited is paying N621 billion as tax credit, noting that the Minister of Works and Housing, Mr. Babatunde Fashola, had carried the group along as to the progress being made.

Apart from the 25 per cent increase, Othman stated that after setting aside 20 per cent of its revenues for capital projects, NARTO has acquired a new office building at Apapa, Lagos for its head office at the cost of N200 million.
He explained that workers’ welfare was also being considered, plus the achievement of closer collaboration with stakeholders.

Othman explained that while NARTO was aware of the difficult conditions its members were operating in, it was doing everything possible to ease the difficulties.
“To this end, I am pleased to inform you that 25 per cent increase in freight rate has been approved by the government. Though this might not be adequate but it is the best we can get under the existing PMS pricing template of N165 per litre,” he said.

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Mr. Farouk Ahmed, who was represented by the Executive Director, Distribution System, Storage, Retail and Infrastructure of the Authority, Ogbugo Ukoha, lauded NARTO for delivering petroleum products to retail outlets from coastal facilities through over 195,000 km vast road network.

He stated that the organisation has held series of engagements with NARTO to address issues bordering on distribution, stressing that it was not unaware of the various challenges currently confronting the industry, specifically with regards to products haulage and transportation.

Also, speaking Fashola, who attended the meeting virtually, stated that NARTO members had been contributing immensely to the growth of the Nigerian economy.

He noted that members of the organisation from up to 98 per cent of the distribution chain of products transportation across the country, stating that although it is  a business, it is also a service to the nation.