Oil marketers resist non-compliance of NIMASA, NPA to FG’s directive on denomination of port charges in Naira 

Oredola Adeola

The Petroleum Products Marketers under the aegis Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), have challenged the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) to comply with the directive of the Nigerian Government on the acceptance of Naira for port tariff and charges in the maritime industry.

Winifred Akpani, Chairman of the DAPPMAN, made this known in a statement released by Mahmood Tukur, Vice Chairman II, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), released on Sunday.

EnergyDay’s check showed that the Nigerian Government had through the Nigeria Midstream and Downstream Petroleum Regulation Authority(NMDPRA) in a communique issued in November 2021, and co-signed by heads of the Nigeria National Petroleum Company Limited (NNPC Ltd), Major Oil Marketers Association of Nigeria and DAPPMAN, and other stakeholders, directed NIMASA, NPA and other agencies of the government to collect ports charges in Naira.

Winifred Akpani, Chairman of the DAPPMAN, in the statement noted that the FOREX conundrum was affecting petroleum marketers.

She noted that freight charges are being denominated in dollars, adding that it takes 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, to charter a vessel that could convey 20,000 metric tonnes of PMS within Nigeria for 10 days.

“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.

“In the same vein, 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.

“Then there are port dues (NPA and NIMASA) 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,” she said.

Akpani described the trend as “quite burdensome” which made operational expenses and procurement increasingly difficult for its members.

She stated that amid this inclement situation, petroleum marketers compete unfavorably with the NNPC which has the upper advantage.

She said the NNPC, historically the supplier of last resort, currently served as the major oil downstream company in the country with the acquisition of OVH.

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

“As a significant portion of their operations and critical operational and capital expenses are denominated in dollars.

“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 removed completely.

Mahmood Tukur, DAPPMAN, Vice Chairman II, corroborating the statement of the Chairman said that the agencies were yet to comply with directives and continued to collect charges in dollars.

He said, “Government gave directives that these agencies should henceforth charge marketers in Naira, but have refused to implement this.

“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.’

“This is a transaction that can be made in Naira. That’s one way of actually taking demand (for dollars) out of the market and it will relax the foreign exchange crisis in the downstream sector.

“If these products are consumed locally and destined for local ports, why is the NPA and NIMASA charging in dollars?

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