Petrol price may increase over likely 21.3 percent freight hike: PEF Official

*The Petroleum Equalisation (Management) Board discloses it is awaiting the Federal Government’s approval before implementing the new PMS freight rate of N9.11 per litre amid consultations with industry stakeholders

Alexander Davis | ConsumerConnect

Against the backdrop of a probable increase in the freight rate to N9.11 per litre, the Federal Government of Nigeria has commenced discussions with representatives of the Organised Labour on how to raise the freight rate of petrol, otherwise known as Premium Motor Spirit (PMS), from current N7.51 per litre to N9.11 per litre.

Alhaji Ahmed Bobboi, Executive Secretary of Petroleum Equalisation (Management) Board (PEF), disclosed this during the 21st Annual General Meeting (AGM) of the National Association of Road Transport Owners (NARTO), at the Zuma Rock Resort, Niger State.

It implies a 21.30 percent hike in freight rate, which is a component of the total cost of petrol under the template of the Petroleum Products Pricing Regulatory Agency (PPPRA).

It was gathered the imminent increase in freight is expected to affect the total calculation, unless there is an equivalent reduction in other cost elements.

Alhaji Bobboi further stated the agency was waiting for the Federal Government approval before it would begin the implementation of the new freight rate of N9.11 per litre.

According to him, the Federal Government is expecting the Labour unions to revert to it on the agreement with the joint committee set by the government on the hike in the price of petrol and electricity tariffs.

In regard to the implementation of freight increase, Malam Mele Kyari, Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC) stated following the conclusion of the deliberations with the Labour, the Federal Government will announce the effective date in line with the pricing template.

The NNPC GMD, represented by Umar Ajiya, Chief Financial Officer of NNPC, in a goodwill message on the occasion, said: “The Executive Secretary of PEF made a statement that there is ongoing engagement between the Federal Government and the Labour, and at the end of that process, government will make adequate pronouncement as to the effective date of that figure as contained in the pricing template.”

He praised NARTO for its operations despite the daunting challenges in the country.

Kyari stated: “We are not unaware of the conditions of our roads, the insecurity, the highways, and also a number extortions do take place along these highways.”

He urged the Association to ensure that its trucks and drivers comply with safety standards at all-time which has been put in place by the regulator towards ensuring hitch-free operation at the depot and on the highway.

The NNPC will continue to cooperate with the association to resolve all the challenges impacting in the distribution of products in the country, according to the GMD.

Kyari noted the NNPC will continue to make payment to PEF for deductions of dues due to NARTO, so that PEF will continue to pay members as and when due.

He urged the transport owners to ensure that their tankers and drivers meet the safety standards set by government regulators for the industry to curb accidents involving petrol tankers.

Alhaji Yusuf Othman, National President of National Association of Road Transport Owners (NARTO), urged the government to implement the new N9.11 freight rate to enable the transport owners to improve their services and increase the wages of their staff including the truck drivers.

Othman assured that NARTO would continue to work to improve the safety of their truck and drivers.

According to him, with the promise of the increase in freight rate there will be more income that will allow more investments in the facilities and at the same time, drivers will be happy because there is clamour from them to increase their package and allowances from now to next month.

“I believe if that freight cost is reviewed, we are going to assent to their clamour and things will be fine by the grace of God,” Othman said.

According to him, the association has made significant contributions to the national economy.

Besides accounting for a large percentage of revenue to government through taxes, rate and levies, NARTO is the biggest employer of labour next to the Federal Government, said the National President.

Meanwhile, the Central Bank of Nigeria (CBN) has said it plans to make the association to be the sole transporter of the outputs of all its programmes, including the petroleum products from the Dangote Refinery.

Babatunde Zaccheus, who represented the Development Finance Department of the CBN, said NARTO members would be transporting dry season farming outputs and products from the Dangote Refinery that is coming on stream very soon.

Zaccheus commended NARTO on coming to the apex bank’s rescue when it needed to transport the fertilizers for dry season farming during the COVID-19 lockdown.