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Indigenous shipping firms get NNPC’s assurance on patronage

By Sulaimon Salau
09 December 2020   |   2:55 am
The Nigerian National petroleum Corporation (NNPC) has expressed its readiness to support indigenous fleet owners to enjoy greater patronage and participation in the oil and gas maritime business in Nigeria.

Mele Kyari

The Nigerian National petroleum Corporation (NNPC) has expressed its readiness to support indigenous fleet owners to enjoy greater patronage and participation in the oil and gas maritime business in Nigeria.

The Group Managing Director of NNPC, Mallam Mele Kyari, gave the assurance while playing host to members of the Nigerian Fleet Implementation Committee who paid a working visit to the NNPC Towers, Abuja.

Kyari said with the scale of the corporation’s activities in the maritime sector, NNPC would get more active in the affairs of the Fleet Management Committee with a view to strengthening the synergy between the corporation and the private sector.

“We believe in this process; we will ensure that Nigerian ships enjoy a greater patronage in the business henceforth,” Kyari assured. Speaking earlier, Chairman of the Committee, Hassan Bello, said Nigeria was losing $1.9 billion to foreign ship owners yearly while appealing to the GMD to encourage NNPC subsidiaries to always engage indigenous shipping companies in their businesses.

He urged NNPC to grant local shipping companies the right of first refusal in crude oil lifting contracts, saying it would help grow the economy and sustain their businesses.

Bello noted that the committee was set up three years ago by the Federal Ministry of Transportation with a mandate to promote Nigerian ownership of ships and vessels to enable local companies take control of the shipping business which is in line with the economic diversification policy of the Federal Government.

Nigeria’s shipping firms have been suffering huge loss to their foreign counterparts, who have benefited immensely from lifting the nation’s crude oil based on the FOB arrangement.

They have therefore been advocating for change in trade arrangement from Free On Board (FOB) to Cost, Insurance and Freight (CIF).

The indigenous firms are yet to enjoy the goodies of crude oil freight arrangement, which hitherto favoured their foreign counterparts through the FOB arrangement.

Under these FOB term, buyers reserve the right to nominate the ship that will carry their cargo to the market. However, all Nigerian crude oil buyers nominate foreign vessels to ship their cargoes and none has ever nominated a Nigerian vessel.

The CIF empowers the seller to clear the goods for export and pay the cost of moving the goods to the port of destination. The buyer bears all risks of loss or damage. The seller, however, purchases cargo insurance.

CIF arrangement would help Nigerian shipowners to acquire bigger tanker vessels of international standards and take their rightful place in the trade of crude affreightment.

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