TheCable

President Muhammadu Buhari has approved the upward review in freight rate for transporters. 

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), disclosed this in a statement on Thursday.

The approval followed a call by the Nigerian Association of Road Transport Owners (NARTO) for an increase in the freight rate for petrol due to the high cost of diesel in the country.

Freight rate is the price at which petroleum products are delivered from one point to another. 

NMDPRA, in the statement, said the approval aimed at alleviating the challenges associated with the nationwide distribution of premium motor spirit (PMS).

According to the regulator, the approval was after due consultations with industry-wide stakeholders at the instance of the NMDPRA. 

“The review was necessitated by the upswing in the global price of petroleum products especially automotive gas oil (diesel) and its implication on the cost of transporting premium motor spirit (PMS) nationwide,” NMDPRA said.

Consequently, the authority advised that in line with its mandate as “prescribed in the PIA (section 31(1)) 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”.

It also said the revised freight rate took effect from June 1, 2022 while still maintaining the current regulated PMS pump price of N165 per litre.

NMDPRA noted that an inter-agency team is being constituted to ensure reconciliation and payment of outstanding transporters’ claims in line with established payment procedures under the bridging fund scheme.

“Meanwhile, the Nigerian National Petroleum Company (NNPC), the sole supplier of PMS, has maintained over 32 days sufficiency in-country,” it said.

“We believe the increase in transporters’ freight rate will further encourage the Nigerian Association of Road Transport Owners (NARTO) and other stakeholders to deploy more trucks to transport PMS nationwide to ensure the adequate supply of the product.

“The authority assures the public of its commitment to building a strong and sustainable Midstream and Downstream Petroleum sector.”

Last month, the Independent Petroleum Marketers Association of Nigeria (IPMAN) complained about the non-payment of bridging claims by the NMDPRA.

However, the NMDPRA said it had paid oil marketers bridging claims worth over N58 billion within six months.