“We Will Have to Suspend Operations”: Tanker Drivers Speak on Strike Over Operational Cost

• Oil marketers are negotiating with road transport owners over freight costs based on a directive from the government
• This came after the union of transport workers threatened to commence strike action, citing the considerable operational expenses
• According to the union, the matter is unrelated to the government, but they believe intervention is necessary.

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The federal government has directed oil marketers to negotiate with the Nigerian Association of Road Transport Owners (NARTO) over concerns relating to freight costs.

According to a Punch report, this is to prevent NARTO members from suspending operations related to lifting petroleum products nationwide.

Legit.ng earlier reported that NARTO announced its decision to halt operations starting Monday, February 19.

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The union cited the considerable operational expenses and inadequate government assistance as the primary reasons compelling their members to temporarily withdraw their tanker operations.

Marketers earlier lamented fuel scarcity in major cities across Nigeria. Some filling stations nationwide had adjusted petrol pump prices to as much as N700 per litre.

Union now discussing with marketers

NARTO's president, Yusuf Othman, said the union is discussing with the marketers who have proposed some increases in the transportation arrangement.

He added that the issue has nothing to do with the government because the government no longer has a hand in the payment of product transportation.

He said the earlier letter to the government was for it to intervene and see why it needs to talk to the other parties because the government naturally has to be an arbiter.

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Othman said:

“In a free market, the government cannot just fold its arms and say everybody should do whatever they like. This is the time we are oppressed downstream because most marketers have increased their pump prices but have not increased our freight rates.

“So since we issued the letters, we’ve met with the marketers about four to five times and are meeting later this evening (Sunday). And I do hope we can conclude before Monday. Otherwise, we will withdraw our services.

“It is not a strike because we are not employees, we are business people, we will just withdraw our services. But I don’t want to believe that it will not be resolved before then because everybody is aware of their responsibilities.”

Speaking on the progress made thus far, Othman said that the government directed that both parties must negotiate because they saw the reason NARTO members need to get some improvement in their freight rates given the high operational cost.

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Freight costs no longer sustainable

Othman had explained last week that NARTO members were operating at a loss and it was no longer sustainable for them to endure the losses.

He stated:

“We will have to suspend operations, latest from Monday. We cannot continue to operate at a loss. Most people have parked. A lot more are going to the park. But from the point of the association itself, we will suspend operations on Monday,” he stated.

“The Lagos to Abuja freight rate that was implemented when the dollar was N650 is still retained now that the dollar is N1,615. Everybody is aware that all our consumables in terms of operation are not produced in the country.

“So, by virtue of the rate of dollars, every consumable has increased. But the freight they are paying us has been the same since Buhari’s time. So how is that feasible? During Buhari’s time, one dollar was N650. Today, the dollar is N1,615. The average freight from Lagos to Abuja is N32."

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Petrol landing cost hits new record

Legit.ng reported that as Nigeria's foreign exchange crisis worsened, the landing cost of imported petrol exceeded N1,000 per litre.

Findings by BusinessDay indicated that the landing cost of gasoline—which includes the product's foreign pricing, transportation, insurance, and other charges—rose to N1,009/litre in October 2023 from N720/litre at the black-market rate of N1,500 per dollar.

According to data from the FMDQ, the naira lost 4.19% of its value after trading on Monday, February 12.

Source: Legit.ng