Oil marketers have accused the Nigerian Maritime Administration and Safety Agency (NIMASA), and the Nigerian Ports Authority (NPA), of still demanding payment in dollars contrary to the Federal Government’s directive on Naira transactions for ports charges.
This is contained in a statement on Sunday by the Vice Chairman II, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Mahmood Tukur.
The federal government through its downstream regulator, and based on an agreement reached with stakeholders, directed ports charges to be collected in Naira.
The directive was contained in a communiqué issued in November 2021, and signed by heads of the Nigeria Midstream and Downstream Petroleum Regulation Authority (NMDPRA), Nigeria National Petroleum Company Limited (NNPC Ltd), Major Oil Marketers Association of Nigeria (MOMAN), and DAPPMAN.
Tukur alleged that the agencies were yet to comply with the directive and continued to collect charges in dollars.
He was quoted as saying: “Government gave a directive that these agencies should henceforth charge marketers in Naira, but that has not been implemented. That’s a major challenge.
“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.
“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 FX effects.
“If these products are consumed locally and destined for local ports, why are 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.”
Government gave a directive that these agencies should henceforth charge marketers in Naira, but that has not been implemented.
Cost of dollar transactions
The statement also quoted the Chairman of the DAPPMAN, Winifred Akpani, as saying that the foreign exchange (FX) conundrum is affecting petroleum marketers.
She noted that to charter a vessel that could convey 20,000 metric tonnes of premium motor spirit (PMS), also called petrol within Nigeria for 10 days, freight charges are being denominated in dollars.
“That comes to about N220 million at official FX rate of N440, and a whooping N440 million for petroleum marketers who have to source FX in the parallel market at N880.
“This implies an additional cost of N11 per litre for this transaction due to the FX official/parallel market differential.
“For this same transaction, Jetty fees, again charged in dollars, comes to N15.4 million at official FX 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 official FX 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 official FX rate and N142.796 million for marketers who source FX 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 noted that amid this inclement situation, petroleum marketers compete unfavourably 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 FX at an official rate for all operators and subsidies removed completely.”
