Business Hilights
Tracking Nigeria's Headline Business News Online

Stop asking for shipping payments in USD, indigenous operators tell agencies

One of the key decisions taken by stakeholders in the Petroleum industry was the end to payment of charges in foreign currencies by indigenous operators to government agencies.

Before now, some government agencies including the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Ports Authority (NPA), the Department of Petroleum Resources (DPR) and others have been collecting certain charges for services rendered in dollars.

This formed the principle decision taken as contained in a communiqué issued at the end of the 10th Oil Trading and Logistics (OTL) Africa Downstream Week, held on 23-26 October, 2016 at Lagos Oriental Hotel.

Stakeholders also suggested that the Naira be prioritized as a means of exchange to maximize the value to ship owners and improve competitiveness at the ports.

The communiqué signed by Mr. Reginald Stanley and Mr. Emeka Akabogu, Esq., Chairman of OTL Africa Advisory Board and Chairman OTL Africa Downstream respectively, harped on the need to urgently review the administration of the current ineffective foreign exchange intervention in the downstream sector in view of the timing gap between the offer of forex and the opening of Letters of Credit, which often erodes the value and usefulness of the offer.

The group further noted that to encourage increased local and foreign investment in the downstream, government must prioritize enthronement of a stable and predictable foreign exchange policy calling on the Central Bank of Nigeria, Federal Ministry of Finance and Ministry of Petroleum Resources to jointly address this as a matter of urgency.

Th4e stakeholders noted that financial institutions should be encouraged to develop special lending arrangements that would allow players in the downstream sector access funds at single digit interest rate to facilitate and sustain growth.

The communiqué said in parts: “To streamline policy interventions, inter-agency collaboration between key branches of Government is strongly advocated and Government should identify supervisory mechanisms to harmonize policy engagements.

“There is need for government intervention by way of policy on LPG to facilitate its growth and make it easily available and accessible.

“Government should urgently adopt a policy of low sulphur fuel specifications Afri-4&5 to protect the health of our people and the environment.

“Government needs to reduce the duty payable on the acquisition of vessels by indigenous operators to make them competitive with their foreign counter-parts”, the Communiqué read in part.

The stakeholders also called for the full liberalization and deregulation of the downstream oil sector, with removal of all hindrances and bottle necks which it said was key for the improvement of private investment and market competitiveness even as it sued for a mitigating policy that would best serve the public and cushion the effect thereof.