News is timeless

FG Reviews Petroleum Products Freight Upwards as NMDPRA Keeps Mum on Percentage Hike


The federal government yesterday announced that it had reviewed upwards the freight rate paid to petroleum products transporters under the Nigerian Association of Road Transport Owners (NARTO), but was surprisingly silent on the newly approved figure.


The development is coming after transporters complained about the rising cost of operations nationwide, threatening earlier in the year to down tools if the issues were not resolved.


In March, the authorities had hiked the rate from N9.5 per litre to N11.87/litre, but it was gathered that in the extant development, an increase of N10 per kilometre across board for the transporters was agreed upon.


Although the Petroleum Industry Act (PIA) provides for a free , market-driven arrangement in the sector, however the industry is still highly regulated by the government, with prices of petrol especially still determined at the whims of government.


A statement by the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), the police of that segment of the sector disclosing the development, noted that the new deal was a result of several consultations with industry stakeholders.


According to the Authority, President Muhammadu Buhari considered and approved the upward review in freight rate for transporters to alleviate the challenges associated with the distribution of Premium Motor Spirit (PMS) or petrol.


“The review was necessitated by the upswing in the global price of petroleum products especially Automotive Gas Oil (diesel) and its implications on the cost of transporting PMS nationwide.


“Consequently, the Authority wishes to advise as follows that: In with the mandate of the Authority as prescribed in the Petroleum Industry Act (PIA) (Section 31(j) to develop and enforce a framework on tariffing and pricing for natural gas and petroleum products, the transporters freight rate has been reviewed to reflect current market realities.


“The revised freight rate takes effect from 1 June 2022 while still maintaining the current regulated PMS pump price of N165.00/litre,” it said.


The NMDPRA explained that an inter-agency team was being constituted to ensure reconciliation and payment of outstanding transporters claims in line with established payment procedure under the Bridging Fund Scheme (BFS).


It expressed the belief that the increase in transporters freight rate will further encourage NARTO and other stakeholders to deploy more trucks to transport petrol nationwide to ensure adequate supply of the product.


“The Authority assures the public of its commitment to building a strong and sustainable midstream and downstream petroleum sector,” it stressed.


In a related development, it said that the Nigerian National Petroleum Company Limited (NNPC) the sole supplier of petrol, has maintained over 32 days sufficiency in-country and asked consumers not to fret about rumours of scarcity.


Meanwhile, the NMDPRA has invited licensees, permit holders and other stakeholders in the midstream and downstream petroleum sector to make submissions within 21 days in respect of the proposed regulations under the PIA.


It listed the regulations to which the stakeholders’ consultation relates to as: gas pricing regulations midstream and downstream decommissioning and abandonment regulations as well as environmental regulations for midstream and downstream operations.


Others, it stated, involve environmental remediation fund regulations as well as midstream and downstream gas infrastructure fund regulations.


In addition, the Authority said another area of concern is that of natural gas pipeline tariff regulations and urged stakeholders to visit its website to review the proposed regulations.

Culled from THISDAY

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More