News

February 21, 2024

Petrol: NNPC, TotalEnergies agree freight rate increase with NARTO

NNPC

By Obas Esiedesa, Abuja

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Engr. Farouk Ahmed has disclosed that NNPC Ltd and TotalEnergies have agreed a new freight rate with the Nigerian Association of Road Transport Owners, NARTO.

Farouk said the agreement which was reached at a meeting in Abuja brokered by the Federal Government in a bid to resolve issues between oil marketers and transport owners would allow the resumption of lifting of petrol across the country.

He said negotiations between the tanker owners with other oil marketers would continue.

He explained that the last freight rate review was done in March 2022 during the petrol subsidy regime when the cost of diesel was N700 per litre but has now risen to N1,400.

Ahmed explained that with the full deregulation of the downstream sector, the government was no longer in the position to determine freight rate in the industry.

“NARTO members were requesting for an increase but as a regulator, NMDPRA, we said we were not going to enforce any price increase because the market is deregulated. Therefore we asked them to meet with the marketers that they service to negotiate on one on one basis. The marketers were reluctant to increase the rate and that led to the strike action.

“We thank God that after negotiations yesterday and today (Monday and Tuesday) they arrived at a conclusion. Some of them have agreed on rates like the NNPC, Total but there are a few others left and negotiations are continuing”, he added.

Also speaking to journalists, NARTO National President, Alhaji Yusuf Lawal Othman said the group would continue to negotiate with other marketers and the government to improve the business environment for the transportation of petrol across the country.

He noted that while the details of the agreement was still being worked out, it would improve the current freight rate of N32 per litre.

He assured that the new rate would not have any impact on the current pump price, as the price has room to adequately accommodate the new rate.

“This has no relation with the pump price. Our agitation is as regards the freight rate, for the transportation of petrol. In any case you have to transport the fuel before you sell it and if the amount they are paying is not adequate to move the product to the stations, you will not see it to buy.

“There has been some movement even though it is not what we expected but at least we have made some movement. Going forward we will continue to negotiate with the marking companies based on economic realities”.

The Minister of State Petroleum Resources (Oil), Senator Heineken Lokpobiri, had on Tuesday said the government has agreed to pay outstanding bridging claims for the transportation of premium motor spirit, petrol, across the country.

He said all outstanding bridging claims would be verified and paid by the government.

Lokpobiri stated that while most of the issues raised by the transporters were commercial in nature, the Federal Government has stepped in to ensure that solutions were found and the lifting of products resumed.

“We have given our commitment and we have started paying some of the bridging claims. We have also committed that in the next four weeks maximum by the middle of next month we would have done with the reconciliation so that those that are owing will pay up”.

He said the oil marketers and NNPC Limited will continue to engage with the stakeholders to ensure the supply of petrol across the country.