Oil marketers urge NIMASA, NPA to commence port charges in naira

Oil marketers in Nigeria have urged the Federal Government’s maritime agencies, including the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), to commence port charges in Nigerian naira as directed by the Federal Government.

This was disclosed on Sunday evening in a statement by the Oil Marketers Association of Nigeria through Mahmood Tukur, the Vice Chairman II of the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN).

The marketers noted that the directive given by the government has not been implemented, adding that the lack of implementation has been a “major challenge “ to their operations.

Their argument: The Oil Marketers Association of Nigeria recalled that the government directed that these agencies should henceforth charge marketers in naira, but that directive has not been implemented. They said:

• “That’s a major challenge. The dollar price is practically driven by demand, if there is no supply, obviously the price will rise. So, every time a vessel needs to berth, we have to pay port charges in dollars.
• “But we are saying that can be paid in Naira. That’s one way of actually taking demand (for dollars) out of the market and it will cool the FOREX effects.”

They argued that if the oil products are to be consumed locally, why should the NPA and NIMASA charge in dollars?

• “They should simply implement a directive given by the government, and we can assure you that this will also bring down the price of petroleum products.”

Additional costs: Winifred Akpani, Chairman of the DAPPMAN, also added that the cost of chartering a vessel to convey about 20,000 metric tonnes of PMS within Nigeria for 10 days, is in dollars.

• “That comes to about N220 million at the official FOREX rate of N440, and a whooping N440 million for petroleum marketers who have to source FOREX in the parallel market at N880.
• “This implies an additional cost of N11 per litre for this transaction due to the FOREX official/parallel market differential.
• “For this same transaction, Jetty fees, again charged in dollars, come to N15.4 million at the official FOREX rate and N30.8 million for petroleum marketers who source from the parallel market.”

A burdensome trend: She noted that the Jetty Berth is charged in dollars and comes to N2.2 million at the official FOREX rate and N4.4 million at the parallel market. She also added that port dues to NPA and NIMASA are charged in dollars, which come to N71.51 million at the official FOREX rate and N142.796 million for marketers who source FOREX from the parallel market.

Akpani called the trend “quite burdensome” as it adds to operational expenses, making procurement increasingly difficult for its members. She also warned of the consequences, saying: 

• “Without a level-playing field, especially one that guarantees access to dollars for all marketers at the official rate, marketers’ ability to import products is continually and severely hampered.”

She urged that the full availability of products, particularly PMS will experience a marked boost when access is granted to FOREX at the official rate for all operators and subsidies are removed completely.

In November 2021, the FG ordered that the port charges should be collected in naira.

FG’s earlier directive: Recall Nairametrics reported last month that the Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Olumide Adeosun, warned that “Oil marketers have consistently complained about their inability to import products due to forex scarcity, rising inflation, including excess and multiple import charges and taxes by the Customs and relevant government agencies. He said: 

• “The current scarcity of petrol was occasioned by supply inadequacy in the last few weeks as well as distribution challenges created by the unavailability and continuous surge in international prices of diesel.” 

He also urged that the current single supplier strategy be reviewed in the meantime.