Joseph Bakare
The Senate Committee on Local Content has advised the Nigeria National Petroleum Corporation (NNPC) to patronize local shipping lines to block revenue leakages of over $120million annually.
Chairman of the Committee, Sen Teslim Folarin gave the advise on Tuesday, December 8; during a meeting between the Senate Committee on Local Content; the NNPC management, and the Ship Owners Association of Nigeria, (SOAN).
“It is very important we patronise indigenous shipping.
“The whole essence of this investigative hearing is not to trade blames. We understand that they don’t have enough vessels. They don’t have capacity and capacity cannot come from heaven. The GMD here has the capacity to help build capacity. But we must patronize indigenous shipping companies,” Folarin said.
Subsequently, Group Managing Director of the NNPC, Mele Kyari; who had informed the committee earlier that there were no indigenous vessels to patronise, assured the committee that; “I am going to work to support these companies. We will engage our partners”
In a presentation to the committee earlier, Dr Mkgeorge Onyung, the President of SOAN, told the committee that the provisions of Nigerian coastal and local content laws with regards to the shipping of petroleum products in the downstream sector of the oil industry are being breached in favour of foreign vessels. Equally important, he decried the situation, noting that had encouraged massive capital flight.
“In the 2019/2020 DSDP disposition, a contract valued at 9 billion USD was undertaken. Freight expenditure on Import Tankers was approximately 60 million USD monthly or 720 million USD annually.
“This involved the average monthly importation of 2.4 billion litres (1.8 million metric tons) of gasoline in foreign-owned tankers of 35,000 to 90,000DWT capacity (approximately 40 shiploads monthly).
“Between January and August 2020, 320 foreign tankers arrived Lagos offshore with imported PMS. This 100 per cent foreign-dominated supply chain activity creates no in-country value for the Nigerian maritime industry with no multiplier-effect on other sectors of the economy.
“Foreign fleet is chartered by NIDAS Marine, NNPC subsidiary, via foreign shipbrokers namely Clarksons, E.A. Gibson, Brassington, Braemer and Affinity,” he said.