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Poor planning stalls rail haulage of petroleum products

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Experts have lamented failure by the Federal Government to commence the haulage of petroleum products by rail, a development they blame on lack of infrastructure, poor planning and corruption.

The government and other stakeholders in the oil and gas value chain have consistently failed to make investments needed to make the dream a reality. Also, about 40 tank wagons worth N1.2b acquired by the Federal Government six years ago for lifting the products to different parts of the country have remained idle.

Bought between 2012 and 2013, the 40 wagons with a capacity for lifting over 1.8 million litres of products at once, would have taken 55 trailers off the road in an instance, reduce huge budgetary allocations to road maintenance, create safer environment and bring about other economic benefits. The lack of support infrastructure at tank farms in the country, however, has stalled the plan.

The Nigerian National Petroleum Corporation (NNPC), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Marketers Association of Nigeria (DAPMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) had indicated interest in hauling products by railway. But the Nigerian Railway Corporation (NRC) and marketers have continued to trade blames on why the project did not take off.

The experts worried that lack of sustainable development in transportation could continue to affect the nation’s economy negatively, if urgent actions are not taken.

They questioned the capacity of the NRC to lift products in a sustainable way. There were also indications that truck owners were frustrating the plan out of fear of losing their businesses.

NRC’s Director of Operations, Niyi Ali, told The Guardian the marketers are either not linked with rail lines or lack facilities that would enable safe loading and offloading of products.

Despite the fact that government is currently overhauling the rail system with over $40 billion, The Guardian learnt that upcoming refineries and other oil facilities are not in any way linked with rail tracks.

This means the country could continue to cope with the impact of heavy-duty trucks, because many operators are skeptical about pipelines due to recurring vandalism.

Ali said the marketers have built access for road tankers in Apapa but have not done the same for rail tankers. Since moving the products by rail is cheaper and more sustainable than road, Ali said the options should become more attractive to investors, if government constructs the Standard Gauge from Lagos to Kano.

MOMAN’S Executive Secretary, Clement Isong, said the oil majors have been in talks with the corporation over the issue. He said the association has to carefully examine the option, especially inherent challenges that surround the capacity of the rail company.

However, if the plan would require the association to make further investment, especially in areas where they cannot recover their fund, Isong was not certain of the viability, stressing that such investment under an industry where prices are controlled by government would remain hard to pin down.

Given that government has invested in building storage facilities across the country through the NNPC, Isong did not also see the business sense in asking marketers to build tank farms where government has already invested and could simply provide needed facility for rail haulage.   

General Manager, Corporate Services of the Petroleum Equalisation Fund (PEF), Goddy Nnadi, said the board, set up by government to subsidise the transportation of petroleum products, to ensure that prices are uniform across the country, would begin equalisation of transportation by rail.



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