Nigerian Association of Road Transport Owners (NARTO) said the upward review of the freight rate for premium motor spirit (PMS) will reduce operational losses.
The upward review was approved by President Muhammad Buhari as disclosed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
NMDPRA said the approval would alleviate the challenges associated with the nationwide distribution of premium motor spirit (PMS).
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.
While speaking on Friday, Yusuf Othman, NARTO’s president, lauded the decision of the federal government and other regulators.
Othman said the review would help cushion the effect of the rising cost of diesel on the operations of transporters.
“It is a very good development, and it shows that the government is being proactive.
“It will go a long way in cushioning the effect of the diesel cost on our operations.
“Like we keep saying, diesel is more than 70 per cent of our operational cost. So, it was certain that the high diesel cost would affect our operations.
“You cannot take products from Lagos to Abuja and other areas while running at a loss.”
Othman said normalcy would be restored to the petroleum products distribution sector, adding that NARTO members had been struggling to operate for a while.
He added that although the government has not communicate the new freight rate to marketers and transporters, he was optimistic the increment would help reduce operational losses.
He, however, assured Nigerians that the scarcity of petrol being experienced in Abuja and other parts of the country would soon abate.
“More of our members will resume bridging, which is the transportation of petroleum products from depots to other areas across the country following this development,” Othman added.
“NARTO members are ready to reciprocate the government’s gesture. We are very happy with this timely intervention.”