Nigeria Loses $5m Daily in Crude Oil Lifting

Not less than $5 million that should have accrued into the central till is being lost daily as a result of the faulty trade policy in the lifting of Nigerian crude oil, THISDAY has learnt.

 

Similarly, not less than $750 million would be saved monthly if the Federal Government can adjust its import trade policy from on Cost, Insurance and Freight (CIF) basis to Free on Board (FOB) basis.

 

A key player in the shipping sector of the economy, Chief Chijioke Collins, disclosed these while speaking with journalists in Lagos, and expressed dismay over the huge losses Nigeria is incurring as a result of bad trade policies, especially in the lifting of crude oil.
Collins, who is also the Chairman, Nigerian Maritime Exposition (NIMAREX) 2012 Planning Committee, noted that amongst all the oil producing nations in the world, Nigeria remains the only nation that runs a different trade policy.

 

His words: “Other oil producing nations of the world trade their crude oil on CIF basis. This means that if you are buying their product it will be their responsibility to delivery to your destination wherever the cargo is going to. They will ensure that they deliver. That is how other nations trade the world over except Nigeria.

 

“So we are optimistic that during or after this event, government will see reasons to adjust our crude oil sales policy from FOB to what the rest of the world is doing, which is CIF. If that happens, it will mean a lot of job opportunities for Nigeria shipping companies. It will mean a lot of added revenue.

 

“For instance we lose about $5 million everyday because of this faulty trade policy. $5 million a day added to the economy will make a lot of difference. Also look at the recent strike action caused by the removal of fuel subsidy which made the Federal Government to be at war with its citizens over N1.33 trillion fuel subsidy.

 

“For us in the shipping sector, we laugh to tears because the implementation of the Cabotage Act, which was signed into law about nine years ago, if implemented, would be more than enough subsidy. It will provide for this subsidy fund we are talking about”, Collins said.
He decried a situation where Nigeria remains an import-dependent nation with over 120 million tonnes of cargo every year, but because of her faulty trade policy, her import continues to be based on CIF as opposed to her export which is based on FOB.

 

According to him, “if the government can adjust Nigeria’s import trade policy from CIF to FOB on a monthly basis we can generate not less than $750 million that will stay in our coffers and circulate within the economy. So there are the numerous opportunities that abound in the maritime sector but up till today these policies are yet to be adjusted.

 

“But we strongly believe by the grace of God that these will be done. Every day, we tranship not less than 30 million litres of product within our waters. Like you rightly know NNPC and PPPRA are coming up with figures of what we consume every day.  These cargos are brought into Nigeria and they are transhipped on a daily basis.

 

“The cargo volume of 30 million litres is a lot of cargo. It is transhipped here with zero participation of indigenous ship owners. We do not participate because it is a carefully orchestrated design by those who import these cargos to scheme the players out completely.
“They give irrevocable payment orders for large quantities of products to be supplied to Nigeria. These irrevocable payment orders are given to very few Nigerians and their foreign counterparts”, he added.

 

Continuing, Collins said: “Once these cargoes are brought in, they already have arranged lighterage ships with their counterparts who have shipped the cargos. These ships are littered all around our waters in violation of the Cabotage Act. So when the mother vessels come in with the consignments NNPC players scheme us out completely.

 

“We offer our ships to do the lighterage at N2.50k a litre but they will say no to us and they use the same foreign ships for lighterage at N4.00 per litre simply because of what some people may benefit out of the trade.
“So with the implementation of Cabotage now, you discover that this daily 30 million litres of products would be contracted to local ship owners and by so doing a lot of employment will be generated. Ship owners will have monies to buy better vessels for their operations and other things”, he added.

 

The maritime expert expressed optimism that the sector would witness a boom if the bad trade policies are adjusted and the full potentials in it unlock for the benefit of Nigerians.
He explained that this was one of the reasons why stakeholders in the maritime sector of the economy have come together to organise NIMAREX 2012 to serve as a platform for the unlocking of the numerous potentials in the sector.
He expressed optimism over the responses so far received in respect of the maritime exposition slated for next month at Eko Hotels and Suites, Victoria Island, Lagos.

 

“The response has been quite encouraging because what we want to show the rest of the world is something they believe in. Something that is true and real.  The opportunities are real, they are there.
“So this is what has really ignited their interest particularly the foreign maritime players.  They know that what Nigeria is showcasing is in existence. They know that the opportunities are there and that’s why the interest is being simulated”, he added.