Oil marketers want NIMASA, NPA to obey govt’s directive on naira transactions

Oil marketers have 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.

The Second Vice Chairman, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) Mammod Tukur, who made the call said both agencies were yet to comply with the government’s directive given about a year ago.

In a communique signed by heads of the NMDPRA, NNPC, MOMAN and DAPPMAN, in November 2021, the government, through its downstream regulator, and based on agreement among stakeholders, directed that port charges should be collected in naira.

But since the directive was made, the agencies had continued to collect the charges in dollars

Tukur said, “Some years ago the Vice President chaired a meeting which included the Chief of Staff, talking about the fact that marketers having to pay port charges to NPA and to NIMASA in dollars was no longer acceptable because it was affecting the sector.

“A directive was given that these agencies should henceforth charge marketers in naira, but that has not been implemented. That’s a major challenge.

“The price of dollars is practically driven by demand. If there’s no supply, then obviously the price will rise. So in this instance, every time a vessel needs to berth, we have to pay port charges in dollars.”

Tukur added, “But we are saying that it 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.

“If these products are consumed locally and are destined for local ports, then why are the NPA and NIMASA charging 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.”

On her part, the Chairman, DAPPMAN, Winifred Akpani, explained how the foreign exchange conundrum was affecting petroleum marketers.

She said, “For example, to charter a vessel to convey 20,000 metric tonnes of PMS within Nigeria for 10 days, freight charges are denominated in dollars, that comes to about N220m at an official forex rate of N440 and a whooping N440m for petroleum marketers who have to source forex from 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 N15.4m at official forex rates and N30.8m for petroleum marketers who source from the parallel market.

“In the same vein, Jetty Berth is charged in dollars and comes to N2.2m at the official forex rate and N4.4m at the parallel market rate. Then there are port dues (NPA and NIMASA), which are charged in dollars, which come to N71.51m at official forex rate and N142.796m for marketers who source forex from the parallel market.”

Akpani described this as burdensome and had made operational expenses and procurement increasingly difficult for DAPPMAN members.

She stated that amidst this petroleum marketers are still forced to compete, rather unfavourably with the NNPC which had access to forex at the CBN exchange rate and also had the added advantage of getting products through swap arrangements.

She said, “The NNPC which historically served as the supplier of last resort, is now the major oil downstream company in Nigeria with the acquisition of OVH and has full access to dollars at CBN’s official rates.

“Without a level-playing field, especially one that guarantees access to dollars for all marketers at official rates, 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 official rates for all operators and subsidies removed completely.”

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