Nigeria is on the brink of experiencing another fuel scarcity episode, as the Nigerian Association of Road Transport Owners (NARTO) declared their intention to cease the transportation of petroleum products starting from the upcoming Monday due to escalating operational costs.
NARTO affiliates have consistently voiced their distress over the surging expenses for diesel, which is essential for fueling their trucks that distribute petroleum products nationwide.
According to reports from oil marketers on Thursday, the price of diesel fluctuates between N1,250 and N1,400 per litre, varying by purchase location.
Yusuf Othman, the President of NARTO, announced in a statement from Abuja on Thursday, confirming the association’s decision to halt their trucks from Monday.
He explained, “The reason is the operational costs far exceed the total earnings, including both local and bridging revenues.”
Othman highlighted that NARTO members have been operating at a loss, and continuing under such financial strain is untenable.
“We are compelled to suspend operations no later than Monday. Operating at a loss is unsustainable. Many have already halted their operations, and many more will follow. However, as an association, our suspension will commence on Monday,” he remarked.
Efforts to solicit the assistance of key stakeholders, the Federal Government, and industry practitioners have so far not been fruitful, according to Othman.
He mentioned that NARTO has sent numerous letters detailing the unsustainable cost of operations to several high-profile officials and organizations, including the Chief of Staff to President Bola Tinubu, the Minister of Petroleum Resources, the Department of State Services, the Nigerian Midstream and Downstream Regulatory Authority, the Nigerian National Petroleum Company Limited, and oil marketers.
“Despite our outreach, there has been no response,” Othman lamented.
He pointed out that the freight rates that were established during former President Muhammadu Buhari’s tenure remain unchanged, despite significant currency depreciation.
“The freight rate from Lagos to Abuja, set when the dollar was at N650, persists now that the dollar has risen to N1,615. Given that all operational inputs are imported, the dollar rate surge has inflated costs. However, our freight compensation has remained static since the Buhari administration,” Othman explained.
Detailing the economics of local and bridging operations, he demonstrated how the current rates are financially inviable. For example, transporting fuel within Lagos (local) is remunerated at N120,000, while diesel costs for such a trip amount to N140,000, based on the current diesel price of N1,400/litre. This discrepancy illustrates the financial impossibility of maintaining operations under these conditions.
Othman further illustrated that the expenses for transporting products from Lagos or Warri to other states exceed the government’s bridging claims, which are supposed to equalize fuel pump prices nationwide but have been ineffective.
NARTO, serving as the collective voice for owners of commercial vehicles in Nigeria, plays a crucial role in the haulage of petroleum products, general cargo, and passenger transportation both domestically and across the West African sub-region.
The association has previously raised multiple issues affecting their operations and the overall efficiency of petroleum product transport in Nigeria, including poor road conditions, traffic congestion, insufficient parking facilities, excessive security checkpoints, delayed payments, safety concerns, policy and regulatory challenges, and difficulties in accessing affordable financing for vehicle upkeep and modernization.