The economic and resources waste caused by the persistent traffic jam in the Apapa area of Lagos is enough reason for government to consider evacuating petroleum products via alternative channels. FESTUS OKOROMADU writes on the need for government to support the Petroleum Equalization Fund (Management) Board (PEFMB) quest to engage railway transportation alternative.
Going through the history of the establishment of the Petroleum Equalization Fund (Management) Board (PEFMB) which is available at the agency’s website two key issues stroke my mind.
First was the fact that as far back as 1974 most petrol service stations nationwide were characterised by long queues due to frequent severe shortages of petroleum products.
According to the narrative, the problem then was said to be compounded by the hazardous way marketers priced the product on the basis of transportation cost incurred by them.
Therefore in an effort to solve the problem, the federal government set up an inter-ministerial committee comprising the then ministries of mines and power and transport, the Nigerian Ports Authority (NPA), the Nigerian Railway Corporation (NRC), and the Petroleum Products’ Marketers to examine the situation and make appropriate recommendations.
The committee was said to have observed that the only variable element in the provision and the sale of petroleum products at uniform price nationwide was the transportation cost.
The committee was said to have blamed the limited local refining capacity and inadequate distribution facilities for the problem.
Meanwhile, as part of efforts to bridge the inequality in the transportation cost of distributing products throughout the country, the Petroleum Equalization Fund (Management) Board was established.
The Case For Railway Transportation Of Petroleum Products
Unfortunately, since the establishment of PEFMB, the agency seem to have continued to work with oil marketers with so much emphasis on road transportation. This of course appears to negate the initial concept of the participation of authorities of Nigerian Railway Corporation (NRC) in the committee that gave birth to the agency.
The impact of this use of road for the movement of petroleum products across are enormous and evident for all to see.
Apart from huge wear and tear of the nation’s roads which has lead to accidents and deaths due to use of trailers and trucks for transporting products, the Apapa traffic jam is a serious concern.
Ordinarily, it would have been heartwarming to hear from the incumbent executive secretary of PEFMB, Mr. Ahmed Bobboi, that the agency was working towards adopting railway transportation.
Bobboi, who spoke at a training for journalists in Abuja, recently, however said the planned comWmencement of the haulage of petroleum products through the railway was suspended due to the proposed policies of the federal government concerning the rails.
He explained that the board was waiting to secure approval from the government as regards the rail system, so that it can enter into discussions with the eventual managers of the railway on the modalities for the transportation of premium motor spirit and liquefied petroleum gas through the railways.
“We planned to introduce the railway equalisation programme last year, but certain developments delayed it.One of the development is the government policy of divesting from that area, because government is considering the concessioning the management of the railway system.
“We want to wait and see who will end up managing the railway, whether it is the government or the private sector, so that we would discuss with them and agree on the modalities,” he said.
He added that the PEF was also considering transportation of petroleum products through the waterways, adding that the introduction of alternative means of transportation of the products would reduce the pressures on the roads and create employment opportunities for Nigerians.
“We are also thinking about marine transportation in the near future.This is because we believe that if we introduce alternative means of transporting the products, it would reduce the pressure on our roads, reduce the wear and tear of the roads, it would also create job opportunities for people who want to work in those areas,” Bobboi noted.
NRC/Oil Marketers Pledge Support
Meanwhile, the management of NRC led by Engr. Freedom Okhiria, had in a interview with a national newspaper back in July 2016, disclosed that his corporation has been meeting with major oil marketers to in his word, “Encourage them to move their products by rail.”
Speaking on the commitment of oil marketers, he said, “We are discussing with the various oil companies that we have tracks extending to their areas of operation like Mobil, Total and Oando. We have routes in Lagos and in Kano; we are asking them to partner with us. We have been discussing this.
“For instance, during the period of fuel scarcity, they were monitoring their business. Now that fuel supply has opened up, we have got in touch with them to use the services we have.”
On the concerns expressed by the marketers previously, Okhiria said, “We can now guarantee the integrity of our tracks and tankers. They have, at a time, expressed fears over the integrity of tracks and tankers through our routes. But now, we have imported 40 tank wagons. We stopped at that because they are for specific liquid items.
“We can move 20 tank wagons at once, of 44,000 litres each. If you multiply these figures, we are talking about 880,000 litres. For instance, if we have about 880,000 litres of fuel in Kano city in one day, it will make a very great impact. We are talking with them and we are hoping that sooner than later, we will be partners in progress and we will start moving fuel by rail in place of road haulage.”
The marketers however expressed some worries, according to the NRC boss. “Their worry is that they have invested heavily in road trucks when the rail was not very effective; but what we are saying is that they can move oil products from Lagos to Kaduna on rail and the road trucks can take it to places like Sokoto State where the rail cannot reach. The road will last longer and the economy will be better for it.”
The Need For Policy Framework
Bearing in mind the fact that PEFMB is fortunate to be one of those agencies in the sector that is expected to remain post the PIGB (Petroleum Industry Governance Bill) era, the need to workout the policy for rail haulage is inevitable.
As noted by Engr. Okhiria, the economic benefits of doing this is enormous. According to him, using rail would remove imported products off the road, making the road to last longer; accidents would reduce and the cost of doing business would reduce because the rail transport cost is always cheaper than other means of transport; and would impact the economy of Nigeria.
“I must not forget to add that the solution to the traffic jam in Lagos in general and Apapa in particular is deploying alternative ways of moving petroleum products from the ports to the hitherland. This is why, PEFMB is in a better position to drive this initiative. Government therefore most give the board the necessary support to do so,”he added.