Petrol scarcity: Bad roads, high operational costs fingered as shortage persists

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Petrol scarcity: Bad roads, high operational costs fingered as shortage persists

With no end in sight in the ongoing petrol scarcity across the country despite the recent hike in pump price, the Nigerian Association of Road Transport Owners, NARTO, has blamed bad roads in the country and the high cost of operation for the supply challenges faced by the operators.

The National President of NARTO, Alhaji Yusuf Othman who stated this at the 23rd annual general meeting/conference in Abuja yesterday said despite the fact that the Federal Government reviewed freight rate thrice last year, challenges remained.

Othman noted that transport owners were facing multiple challenges in all areas of the business, making it difficult for them to break even.

He stated that high cost of capital has also made it impossible for the operators to raise funds to replace their trucks, adding that banks charged 25 per cent as interest on loans.

“In terms of our rising operational cost, we are merely trying to break even. The most important and primary input in our operations is Automotive Gas Oil, AGO, which is the major energy source used by our trucks. Unfortunately, however, the average major energy source price as at November 2022 was N808.87 as against N277.89 in 2021”, he stated.

Speaking at the conference, the Minister of Works and Housing, Babatunde Fashola said President Muhammadu Buhari’s government has done a lot in the past few years to improve road conditions across the country

He disclosed that with the tax credit scheme alone the Federal Government has approved N621 billion for the Nigerian National Petroleum Corporation, NNPC, for the reconstruction and rehabilitation of 21 critical roads across the country in the first phase.

He said the government also last week approved another N1.9 trillion under the tax credit scheme for the reconstruction of 44 critical roads and bridges through the NNPCL.

“The combined approvals (N2.52 trillion) will not just make these roads better but also bring businesses for truck owners, jobs for tanker drivers and food for families. We know that if we play our roles, your businesses will thrive and you will employ people”, he added.

Meanwhile, in a bid to find a lasting solution to petrol distribution challenges, the Federal Government yesterday constituted a 14-man Steering Committee on Petroleum Products Supply and Distribution management.

The committee which is headed by the Minister of State Petroleum Resources, Chief Timipre Sylva is expected to among other things to ensure transparent and efficient supply and distribution of petroleum products across the country.

“Other terms of reference are to ensure national strategic stock management, visibility on the NNPC Limited refineries rehabilitation programme and ensure end-end tracking of petroleum products, especially PMS to ascertain daily national consumption and eliminate smuggling”.

Chief Sylva, according to a statement by the Ministry, directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure strict compliance with the government approved ex-depot and retail prices for PMS.

The Minister has further directed the NMDPRA to ensure that NNPC Limited, which is the supplier of last resort, meets the domestic supply obligation of PMS and other petroleum products in the country.

He further directed that the interests of the ordinary Nigerian be protected from price exploitation on other deregulated products such as AGO and DPK and LPG.

Other members of the committee are Minister of Finance, Permanent Secretary, Ministry of Petroleum Resources, National Economic Adviser to the President, Director-General, Department of State Services (DSS), Comptroller-General, Nigerian Customs Service (NCS), Chairman, Economic and Financial Crimes Commission Member

(EFCC), and Commandant-General, Nigerian Security and Civil Defence Corps (NSCDC)

Others are Authority Chief Executive, Nigerian Midstream and Member Downstream Petroleum Regulatory Authority (NMDPRA), Governor, Central Bank of Nigeria (CBN), Group Chief Executive Officer, NNPC Limited, Special Advisor (Special Duties) to the HMSPR while the Technical Advisor (Midstream) to the HMSPR will serve as Secretary.