The Nigerian Oil Marketers Association has urged the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) to obey the Federal Government‘s directive on Naira transactions for port charges. This is contained in a statement issued by Vice President II, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN). The federal government, through its downstream regulator, and based on the agreement reached with the interested parties, mandated that port charges be collected in Naira. The directives were contained in a statement issued in November 2021 and signed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, the Nigerian National Petroleum Company Limited , the Nigerian Petroleum Marketers Association and DAPPMAN. Tukur claimed that the agencies had not yet complied with the directives and continued to charge fees in dollars.
“The government instructed these agencies to charge vendors in Naira from now on, but that had not been implemented. That is a great challenge The price of the dollar is practically driven by demand, if there is no supply obviously the price will go up. So every time a ship needs to dock, we have to pay port charges in dollars. But we are saying that you can pay in Naira. That is a way to remove the demand (for dollars) from the market and will cool the FOREX effects. If these products are consumed locally and are destined for local ports, why do ANP and NIMASA charge in dollars? They should just implement a given directive, and we can assure that this will also reduce the price of petroleum products,” Tukur said.The statement also quoted DAPPMAN President Winifred Akpani as saying that the FOREX conundrum was affecting oil traders. He noted that to charter a ship that could carry 20,000 metric tons of PMS within Nigeria for 10 days, the freight costs are expressed in dollars.
“That works out to around N220 million at the official FOREX rate of N440, and a whopping N440 million for oil sellers who have to get FOREX on the parallel market to N880. This implies an additional cost of N11 per liter for this transaction due to the official/parallel FOREX market spread. For this same transaction, Jetty’s fees, again charged in dollars, amount to N15.4 million at the official FOREX rate and N30.8 million for oil traders sourcing from the parallel market. Similarly, Jetty Berth is charged in dollars and reaches N2.2 million at the official FOREX exchange rate and N4.4 million in the parallel market. Then there are the port fees (NPA and NIMASA) charged in dollars, which amount to N71.51 million at the official FOREX rate and N142.796 million for traders obtaining FOREX from the parallel market,” he said. Akpani described the trend as “quite onerous”, making operating expenses and acquisitions increasingly difficult for its members.
He indicated that in the midst of this inclement situation, oil traders compete unfavourably with NNPC, which has a superior advantage. She said NNPC, historically the supplier of last resort, now served as the country’s top oil company with its acquisition of OVH. “Without a level playing field, especially one that guarantees access to dollars for all traders at the official exchange rate, the ability of traders to import products is continually and severely hampered. As a significant part of its operations and critical capital and operating expenses are denominated in dollars. Full product availability, particularly PMS, will see a marked boost when FOREX access is granted at the official rate to all traders and subsidies are removed entirely.
