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NSC Boss Wants Nigeria’s Petroleum Products Carried on CIF

07 Jun 2013

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Nigeria Shippers Council

John Iwori

The campaign for Nigeria to carry her crude oil and petroleum products on the basis of Cost, Insurance and Freight (CIF) has received a boost with the Acting Executive Secretary of Nigerian Shippers’ Council (NSC), Mr. Hassan Bello, drumming up support for it.

Nigeria presently maintains a regime of carriage of her crude and petroleum products on Free on Board (FOB) basis. The practice has cost Nigeria yet-to-be estimated billions of dollars over the years.

FOB means that the buyer of Nigeria’s crude oil would nominate the ship to carry the cargo to destination of choice. In the same vein, Nigeria buys her imported goods on CIF and sells FOB.
Apparently pained by the enormous loss to the central till by the skewed fiscal policy over the years, several industrial players, especially stakeholders in the shipping sector of the economy have called for a change in the practice to no avail.

Adding his voice to the clamour, Bello, who is also a lawyer, told reporters that Nigeria, nay Nigerians, would benefit more if its goods were shipped on CIF rather than on FOB.
He also called for an urgent review of all obsolete maritime laws in the country, stressing that this was the only way to optimise maritime endowments in Nigeria.

Highlighting that he already documented his view to government as a committee member of a constituted a port reform body, he maintained that selling FOB was detrimental to the Nigerian economy.

“Eighty per cent of oil-producing countries carry their wet cargo on CIF basis. If it is by CIF, it means Nigerians will provide the ships that will carry the cargo”, he added.
According to him, carriage of goods on CIF basis also means big time business for the nation’s insurance industry, in addition to creating a platform that would ensure that Nigerian shippers have new opportunity to own modern ships.

He argued that indigenous shipping companies have been swimming against the tide because of competition, even as he pointed out that despite the country having highly experienced ship masters, capable of carrying Nigeria’s crude, a level playing field may never be created, until government brings to bear, the political will and sagacity to empower indigenous Nigerians to own ships.

Bello however expressed delight that the Shippers’ Complaints Unit in NSC, which was established to address the business class problems, has been very effective.
Giving an insight into what the unit has done so far, the acting executive secretary of NSC said: “Between 2011 and 2012, not fewer than 200 complaints were received and treated with about 80 per cent of them resolved and over N200 million refunds made to Nigerian shippers on demurrage and container deposit returns”.

He added that the success recorded so far by the unit had further encouraged NSC’s resolve to push harder for more service delivery for the benefit of shippers in the country.
Bello also expressed the readiness of NSC to make the dry port become functional. He pointed out that until the inland container depots (ICD) play their expected roles, the problems of port congestion in the country, especially in the ones located in Lagos, would not be permanently solved.

He hailed the investments in ICDs located in Ibadan, Kano, Isiala-Ngwa (Abia), Jos, Funtua (Katsina State) and Maiduguri.
According to him, ICDs were created to bring shipping services to the doorsteps of shippers as well as serve as consolidated points for exports. He expressed hope that more investors would show interest in ICDs presently being run on Public Private Partnership (PPP) basis in the years ahead.

Bello expressed gladness that the Federal Ministry of Transport had recently inaugurated a committee to examine the challenges facing the take-off of the dry ports. He averred that dry ports would be declared as ports of destination and centres of exports, as soon as they were completed.

Bello described the Cargo Defence Fund (CDF) as a kind of insurance arrangement for shippers to ensure they remain in business in case of problems arising out of other parties’ negligence.
“Shippers abandon claims because they do not have the wherewithal to pursue such claims. It is therefore important that we create a special purpose vehicle for the CDF free from bureaucracy to handle shippers’ claims with speed and efficiency”, he said.

He explained that CDF had successfully made worthy impact in pursuing claims of Nigerian shippers in Spain, Germany and other European countries, even as he recalled that a Briton was recently arrested in Cotonou for defrauding Nigerians importing stock-fish worth millions of naira.

Bello emphasised the need for the overhauling of the obsolete laws in the country, pointing out that necessary if the maritime sector must be freed from archaic regulations to enable Nigeria’s maritime sector become the nation’s highest revenue earner.

His words: “Here, we are in the age of electronic interface, we are in the age multi-modernism, we are in the age of door-to-door cargo delivery and so many other nuances of trade and a law has to codify such development. That is why we need to reform not only NSC laws but other operators and other regulatory agencies like the Nigerian Ports Authority. The law must change because NPA is not running transport infrastructure now. They are the landlord under that model”.

Tags: Business, CIF, Featured, Nigeria, NSC, Petroleum Products

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