Business & Economy - News - Oil & Gas - June 16, 2022

Buhari approves additional N10 per litre for fuel transporters’ freight charge

Transporters now gets N20.56 per litre in the pricing template

By Bassey Udo

Barely three months since the Federal Government approved a 25 percent upward review of freight rate for petroleum products in the country, another review was announced on Thursday by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Last March, sequel to a request by the Nigerian Association of Road Transport Owners (NARTO), the Federal Government approved the hike in the freight rate from N9.50 per kilometre to N10.56 per kilometre.

The Chief Executive of the downstream regulator, Farouk Ahmed, said President Muhammadu Buhari has given approval for an additional N10 per litre to be paid to the petroleum products transporters to ease their cost of transporting products.

With the latest review, the transporters would be entitled to about N20.56 per kilometre under the current pricing template.

Ahmed said the intermittent fuel queues experienced in some major cities across the country was as a result of the difficulties experienced by the transporters who kept complaining of high operational cost of moving the products across the country.

With the increment in the freight rate payable to the transporters, the NMDPRA CEO said the transporters would be happy to do their work and ensure products are available at filling stations for consumers.

“As you know, the transporters are not like the government that absorb the extra cost in their operations. So, when they complained, we made a case, which President considered positively and agreed to approve for additional N10 to the previously N10.56 per kilometre paid to them since March this year when the last review was carried. We hope this will help ease thelong queues at filling stations, which has been a recurring feature in recent times,” Ahmed clarified.

Regardless, the NMDPRA Chief said the latest review would not impact on the retail pump price of petroleum products, which would remain at N165 per litre nationwide.

The NMDPRA’s statement read: “His Excellency, President Muhammadu Buhari, GCFR, has considered and approved the upward review in freight rate for transporters to alleviate the challenges associated with the distribution of Premium Motor Spirit (PMS) nationwide.

“The approval was after due consultations with industry-wide stakeholders at the instance of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority).

“The review was necessitated by the upswing in the global price of petroleum products, especially Automotive Gas oil (Diesel) and its implication on the cost of transporting Premium Motor Spirit (PMS) nationwide.

“Consequently, the Authority wishes to advise as follows that:
i. In line with the mandate of the Authority as prescribed in the PIA (Section 31(i)) to develop and enforce a framework on tariffing and pricing for natural gas and petroleum products, the transporters freight rate has been reviewed to reflect current market realities.
ii. The revised freight rate takes effect from 1st June 2022, while still maintaining the current regulated PMS pump price of N165.00/Litre.
iii. An Inter-agency Team is being constituted to ensure reconciliation and payment of outstanding transporters claims in line with established payment procedure under the Bridging Fund Scheme.

“Meanwhile, NNPC, the sole supplier of PMS, has maintained over Thirty-Two (32) days sufficiency in-country.

“We believe the increase in transporters freight rate will further encourage Nigerian Association of Road Transport Owners (NARTO) and other
stakeholders to deploy more trucks to transport PMS nationwide to ensure adequate supply of the product.

“The Authority assures the public of its commitment to building a strong and sustainable Midstream and Downstream Petroleum sector.

It was learned that the new rate was an increase of about N10 per kilometer, bringing the freight rate to N35 per kilometer.

NMDPRA said the latest review was as a result of the rise in the global price of petroleum products, especially Automotive Gasoil (Diesel) and its implication on the cost of transporting petrol nationwide.

“The transporters freight rate has been reviewed to reflect current market realities. The revised freight rate takes effect from 1st June 2022, while still maintaining the current regulated PMS pump price of N165/litre,” it noted.

The authority also said an inter-agency team was being constituted to reconcile and pay all outstanding transporters claims under the Bridging Fund Scheme.

“We believe the increase in transporters freight rate will further encourage and other stakeholders to deploy more trucks to transport PMS nationwide to ensure adequate supply of the product,” the NARTO President said.

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