Nigerians lose N752.25bn in fuel shipment to foreigners
Absence of cabotage vessels has led to Nigerian shipping companies losing N752.25 billion ($1.3bn) services to their foreign counterparts in the shipment of Premium Motor Spirit (PMS) in two years.
Findings revealed that local shipping companies lost $700 million in 2021 and $600 million in 2022 from lifting the petroleum products for Nigerian National Petroleum Company Limited (NNPCL).
Feelers from the industry also revealed that similar losses would be recorded at the end of the current year as there has not been any improvement in the acquisition of vessels to alter the tide.
A maritime lawyer, Barrister Ebenezer Oladimeji, explained that local ship owners would continue to lose such services and money to their foreign counterparts unless government reviews the Cabotage Act 2003.
Under the act, he noted that no ship owners could compete favourably with foreign liners when there is no sufficient vessel in the country, saying that banks are not willing to borrow them money because of uncertainty in cabotage terms and contracts.
Oladimeji noted that there were parameters set for the Cabotage trade the country under sections 2 and 3 of the Act, saying that it had been specified that Cabotage vessel must be wholly owned by Nigerians, manned by Nigerians, registered by Nigerians and built by Nigerian ship yards.
Presently, he said that there was no standand shipyard to build cabotage vessel of 5,000 tonnes in the country, stressing that the protectionist policy would not serve its purpose if government failed to do the right thing by empowering local operators through the disbursement of cabotage fund.
Also, the President of Ship Owners Association of Nigeria (SOAN), Dr. MkGeorge Onyung, said that in 2022, NNPCL brought in about 400 shipments of Premium Motor Spirit (PMS) through foreign shipping vessels, explaining that each shipment cost $1.5 million but the shipping of the oil products was executed by foreigners.
Onyung said: “That is, for each ship to bring in those 400 cargoes of PMS to Nigeria last year, they collected $1.5 million each. This year alone, the NNPCL has already brought in about 260 shipments of PMS. The price for this year is slightly higher than last year. Each shipment cost Nigeria $2 million. All the ships bringing in this PMS are foreign owned ships. None are owned by Nigerians.
“What does this imply? It implies that this year alone, Nigeria has lost about $600 million to capital flight in the process of bringing in PMS. Every day, ships bring in PMS to Nigeria. Every time a ship calls at our port with PMS, Nigeria loses $2 million.”
He noted that if the country wishes to get her economy right, then much attention must be paid to local shipping services.
The president stressed the need to disburse the Cabotage Vessel Financing Fund (CVFF) to save the country from the economy of the losses. Also, the Managing Director of Sea Transport Services Limited, Alhaji Aminu Umar, stressed the need for Nigeria to have a national fleet to be able to take advantage of the opportunities in blue economy especially in shipping.
He said that scarcity of dollar in foreign exchange market had affected the shipping sector. According to him, there has been downturn in shipping business as the import and export are freighted by ships.
Aminu added that shipping activities in the country had gone down by more than 50 per cent for vessel in oil business. It would be recalled that SOAN had complained to the Federal Government that 98 per cent of cabotage vessels were owned by foreigners, saying that indigenous ship owners paid Nigerian Ports Authority (NPA) tariff in dollars, while foreign ships enjoy reduced NPA tariff and pay in naira.
Also, the association said that foreign vessels received payment for freight in full and always pre-paid, remitted to the offshore bank accounts of their owners.
According to Onyung, Greece-based shipping company, Unibros, has not paid Customs import duty for any of its vessels deployed to execute contract for Nigerian National Petroleum Company Limited (NNPCL), while Nigerian flagged vessels are made to pay full Customs duty and appropriate taxes on earnings which some foreign shipping lines have been evading.
He explained that the country would have benefited in terms of buoyant economy and employment opportunities, if NNPCL had obeyed the law of the land and collaborated with SOAN.
Onyung added that the stance was a total breach and disregard for Nigeria content laws, the Coastal and Inland Shipping (Cabotage) Act and the Presidential Executive
