The Nigerian Association of Road Transport Owners (NARTO) has called on the federal government to remove the 7.5 per cent Value Added Tax (VAT) on the Automotive Gas Oil (AGO), also known as diesel, to avert the disruption in the distribution and supply of the Premium Motor Spirit (PMS) petrol.
Diesel is the product for fueling about 90 per cent of the haulage trucks which convey the petrol from the depots to the retail outlets nationwide.
Prior to the placement of VAT on diesel, its cost was barely above N600/litre but it is now almost N1,000, which has also increased the cost of transporting the PMS.
Also, owing to the high cost of dollar rate, it is expensive to purchase the trucks spare parts and batteries.
Besides, the roads on which the trucks ply are in a very terrible situation.
NARTO National President, Alhaji Yusuf Lawal Othman, who made this known in a press statement issued in Abuja, added that despite the high operation cost, the government has stopped further increase in the pump price of PMS.
He however, noted that since the marketers cannot raise their pump price, it is impossible for them to increase their cost of transportation.
According to him, this has made the cost of doing the business unbearable.
Seeking government’s instant intervention, he said, “We are talking about now, an immediate solution. And the instant intervention is the removal of 7.5 per cent VAT on the diesel because it is increasing the cost of the diesel.
“NARTO is complaining that the high cost of diesel is unbearable.”
He noted that the transporters have found themselves in a helpless situation, stressing, “Even if you discuss it with the marketers all they tell you is that government has fixed the pump price on N617 that they cannot increase pump price so they cannot increase the fare for us. So we are in trouble.”
He noted that unless the government urgently stops the 7.5 per cent VAT on AGO, there will be shortage of supply of the petrol because the transporters may park their trucks in the face of the unbearable cost of operation.
He emphatically noted that the association which is not proceeding on strike, is urging the government to immediately act to avert petrol supply disruption.
Complaining about the situation, he disclosed, “This is the problem we have: diesel is now getting to N1,000. And our transporters are still on the same rate. But the government will say they don’t have business with us because it is deregulated.
“But the marketers say if it is full deregulation PMS go up. Government pegged pump price at N617 because of that even if diesel reaches N1000 they can’t increase transportation for us.
“ And to make things worse, government put 7.5 per cent VAT for the AGO and dollar is about N1,000 now.
On the terrible situation of the roads, the NARTO boss said,
“And you know that apart from this the roads are terribly bad. From Okpella to Lokoja is bad. From Agai to Bida to Kutugi is bad.”
He also noted that “All the spare parts, engine, battery and spare parts are all factors of dollar rate. They have gone up. The engine oil, which is also a factor of dollar rate has also gone up but our transportation remains the same.”
On the whole, Othman said, “So we need serious government attention and it should be urgent.
First of all, government has to look at that 7.5 per cent increase on VAT on AGO because that is one of the reasons why AGO went up.
Two, government has to look at the pump price of PMS so that marketers have to also look at the transportation price for us.
“This is because without looking at the pump price, marketers cannot increase transportation price. And if they do not do that we have no choice than to continue to park. And if we continue to park it will create unwanted disruption of supply and we don’t want that.”
He however recalled that the market had been stable for some very few months until the introduction of the VAT on AGO.
Othman recalled that “At least, since the last few months when the government took over there have been reasonable supply. But if we continue with this trend, naturally there will be shortage and we don’t want that.
“Of course, in some few months we have some reasonable stability.
“The government should come quickly to intervene that is all we are saying, especially that 7.5 per cent VAT because that is what the government used to increase AGO price.”
He added that the association is also concerned about the suffering Nigerians are already going through thus, NARTO wants the government to have a second look at the sealed pump price.
The National President said, “Also, they should look at the pump price because it is also one of the reasons why marketers cannot increase transport cost for us.
“Although we are not necessarily interested in the increase in pump price since Nigerians are suffering, if they don’t increase our transportation cost with AGO at N1,000 and dollar close to N1,000 we cannot operate.
“And if we don’t operate profitably we will start parking and if we start parking it will generate unwanted supply disruption, which we don’t want.”