Major Oil Marketers Association of Nigeria has said that the plan to fix freight rate for Premium Motor Spirit can hinder full deregulation of the downstream sector.
Speaking in Lagos on Tuesday, the Chairman of MOMAN, Mr Tunji Oyebanji, also said the move could also affect competitiveness among players in the industry’s value chain.
Oyebanji was reacting to the plan by the Federal Government to increase the freight rate of PMS, also known as petrol, from N7.51 per litre to N9.11.
The MOMAN boss asserted that market forces should be allowed to determine any such increments.
The Executive Secretary of Petroleum Equalisation Fund, Alhaji Ahmed Bobboi, recently announced plans to raise the freight rate.
Bobboi spoke at the 21st Annual General Meeting of the National Association of Road Transport Owners in Abuja.
He, however, said that the government was waiting for feedback from organised labour on the agreement reached on the planned increase in prices of PMS and electricity to raise the rate.
“When freight (transportation) goes up, it is reflected in the entire value chain and in the price the final product is sold, but this should be determined by market forces,” Oyebanji argued.
According to him, when transporters know that there is a fixed price to their services, some of them would refuse to invest in new equipment that could improve efficiency and safe movement of products.