April 16, 2024

Fuel scarcity imminent as tanker owners withdraw vehicles today

Adebayo Obajemu

The crisis in the oil sector may be compounded as tanker owners have said they will stop the transportation of petroleum products starting today, raising the fear of another fuel scarcity crisis in the country.

Speaking under the umbrella of the Nigerian Association of Road Transport Owners (NARTO), the tanker owners stated that this decision is as a result of rising operational costs experienced by its members, primarily due to the exorbitant price of diesel needed to fuel their trucks for product transportation nationwide.

This is even as petroleum products marketers have been calling for adjustment on pump price to ameliorate the effect of the constant upward movement of dollar that has impacted on their operational costs.

NARTO, in a letter dated February 15th 2024, gave notification to the secretary general of NUPENG, of its desire i to withdraw the lifting of products. In the letter signed by NARTO’s national president, Yusuf Lawal Othman, the transporters placed their grievance on the table insisting that it will down tools from today Monday February 19, 2024.

Chief of its grievances is failed negotiations for appropriate and commensurate freight rate for its operations . Othman averred that the existing rate is not in tandem with members’ operations and until a review is approved they will not return to work.

NARTO members who play cardinal roles in transporting diesel across the country have repeatedly raised concerns over the escalating diesel prices.

According to oil marketers, the current price of diesel ranges between N1,250 to N1,400 per litre, varying depending on the location of purchase.

Othman mentioned the stagnant freight rates, which have remained unchanged despite major rises in operational costs. He stated that while the cost of essential consumables has surged due to the depreciation of the local currency against the dollar, freight rates have remained stagnant since the previous administration.

“For instance, the freight rate from Lagos to Abuja has remained the same since former President Buhari’s tenure, despite the dollar exchange rate nearly tripling. This inconsistency is unsustainable for our members,” he said. Othman further illustrated the financial strain faced by transporters, citing examples of operating costs exceeding earnings. He said that the meagre payments received for local trips barely cover expenses such as fuel and maintenance, let alone other operational overheads.

In addition, the association has raised concerns about delayed payments from oil marketers, exacerbating cash flow problems for transporters. NARTO has also called for regulatory reforms to address issues such as limited access to depots, ambiguous regulations, and difficulties in accessing affordable financing for vehicle maintenance and upgrades.

Meanwhile, the executive secretary of Major Energies Marketers Association of Nigeria, (MEMAN) Clement Isong, in a recent interview said that the current rate on the part of marketers is no longer sustainable. Isong stated that though MEMAN is negotiating with transporters, it is beyond them to determine the rate chargeable for lifting of products.

According to him, it will be unlawful for MEMAN to determine rates for transporters but noted that with the current exchange rate it is a strain on their business to continue to operate with existing rates. The products are dollar priced and the exchange rate is not economically supporting business anymore. The immediate past president of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Elder Chinedu Okoronkwo, in his response advised authorities to listen to the demand of the transporters as business is actually collapsing under the exchange rate regime.