Reps commend NARTO for calling off strike, task FG on issuance of license to local refineries 

Elizabeth AtimeFebruary 24, 20248 min

The meeting resolved to commend the leadership of NARTO and PETROAN for their role in calling off the strike, which has given room for the distribution of petroleum products.

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The House of Representatives Committee on Petroleum Downstream has commended the leadership of the National Association of Road Transport (NARTO) for calling off their strike.

The lawmakers also tasked the federal government (FG) to encourage local refiners with licenses and funding to increase the quality and affordability of products across the country.

Similarly, the House Committee chaired by Rep. Ikenga Ugochinyere (PDP, Imo) agreed to schedule an all-inclusive stakeholders meeting with regulators, NUPENG, and leadership of the National Assembly.

These were the resolutions of the House Committee during a meeting with the National Association of Road Transport Owners (NARTO) and Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) held on Friday at the National Assembly complex.

The chairman while addressing pressmen after the meeting with the aforementioned stakeholders resolved as follows:

The meeting that just ended today, the 23rd of February, 2024, Friday, was between the leadership of the National Association of Road Transport, Owners NARTO, led by the Port Chairman, Alhaji Kassim Bataiya and also Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) led by their President, Dr Billy Gillis-Harry and the meeting was between the members of the House of Representative Committee on Downstream  Petroleum. 

“The meeting resolved to commend the leadership of NARTO and PETROAN for their role in calling off the strike, which has given room for the distribution of petroleum products and also commended the National Security Adviser, Nuhu Ribadu, and the oil Minister for their role in the mediation that ensured that NARTO returned to the road. 

“Also, the Committee agreed with NARTO and PETROAN to find sustainable solutions to the present challenges facing the petroleum product distribution and their outlet owners to avert any further strike or disruption of the supply or retail chain. 

“The committee agreed with NARTO and PETROAN for an all-inclusive meeting with the leadership of the National Assembly, regulators, and other key stakeholders like NUPENG and security agencies to tackle issues of multiple charges, sharp practices, and rising costs of transportation to help achieve sustainable and affordable product distribution and pricing systems. 

The Committee also agreed that because of the sufferings, retail owners and transport owners are going to, as a result of lack of access to funding to fast track the process for the legislative creation of the energy bank and also a council of petroleum products distribution to eliminate these challenges and ensure energy stability, affordability, and availability. 

“The Committee also agreed to the encouragement of local refiners with licenses and funding to increase the funding of quality and affordable products which will help to create more jobs and reduce pressure on our foreign exchange.

The Committee also agreed to closely monitor the ongoing repair of our national refineries. The committee also resolved with NARTO and PATREON that we are going to investigate the issue of retail owners who paid for patrolling products a month after they didn’t get them and the emergence of middlemen who now resell these products to the real petrol outlet owners when asked which is the reason why the price keeps rising.”

We also agreed to a stakeholder’s recommendation for NARTO, and others to help in tackling some of the immediate and long-term needs in the industry to help ensure energy stability. We also agreed to look into the status of over 23 NNPCL depots and the national pipeline network and their status to ensure why some of them are not working because we agreed that if these depots and the pipeline system are working, there will be no need to have pressure on our road or issues of moving these products from the depot to the respective retail outlets. So we are going to look into this situation and find out why the contract given for the repair of some of these pipelines has not been completed to ease the movement of petroleum products.”

The Committee also agreed to a legislative action to look into how to reduce the flight cost by ensuring the dredging of the seaport that can open vessel landing corridors in the other sectors apart from Lagos, Warri, Port Harcourt, Calabar and so on advance on the seaport so that the costs of product movement can reduce and also reactivating in the pipelines of petroleum product distribution and inclusion of modern technological systems of monitoring it to avoid vandalization. And also, we are engaged to consult further on the issue of amending the PIA to provide room for the inclusion of stakeholders in the downstream sector of the distribution in the board so that they can be part of those decision-making processes and be able to resolve challenges when they come up without just waiting for warning strike before stakeholders can come together and start tackling it”

Speaking, the President of the Association of Road Transport Owners, Yusuf Lawal on Friday, said the union called off its industrial action following the intervention of the Federal Government noting that the union is offering its services at a loss due to the cost of subsidy removal and the rise in the cost of the dollar. 

After nobody expressed willingness to negotiate with us, we had no option but to park the trucks and wait for further intervention. Unfortunately, our services are not recognized by the Federal Government and even the citizens of this country. 

Let me give you a typical example. We are paid N30 per litre to lift Petroleum Motor Spirit from Lagos to the NNPC depot in Suleja. N30 per litre of 40,000 litres is N1..2m.

The truck consumes a minimum of 900 litres of diesel at N1,500  per litre which is about N1.450m, which is N250  above the fret rate.

“The N1.3m fret rate is subject to 5 per cent withholding tax deducted and payable to the Federal Inland Revenue Service, which is shared to the three tiers of government without even thinking or considering the drivers’ allowance, wages, salaries. So,  it is difficult if not impossible for a transporter to load a truck from Lagos to any depot.

“The emergence of NARTO was a result of the failure of NNPC now NNPCL to put our pipelines in operation. If we had our pipelines across the country which were designed to move petroleum products from where it was produced or imported to the various NNPC deports across Nigeria, we wouldn’t have these problems.

“We are happy that the committee invited us to this meeting at this crucial time in our nation’s history where our economy is faced by high inflation and the deteriorating exchange rate of the naira.” 

On his part, Bataiya explained that transporters in Nigeria, especially petroleum transporters, are working under extreme operational challenges which include high cost of vehicle maintenance, high cost of spare parts, road conditions, insecurity and lots more. 

It is not possible for us to operate optimally because all the components of trucks today are import-dependent. We import tyres,  batteries,  spare parts and even vehicles are imported at a high cost of the dollar exchange rate. Unfortunately for us, transportation is not even in the classification of dollar allocation. 

We are not entitled to apply for dollar allocation from the Central Bank of Nigeria to import the spare parts and accessories of the vehicle,” he added. 

Continuing, he further noted that “Recently, the Petroleum Industry Act was passed which signifies the end of the deregulated environment where the activities of the centre are left to the power of demand and supply.  This implies that payment of transporters fret is left to be negotiated between the marketers and transporters”, he explained.

Elizabeth Atime

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