Nigeria's foremost Online Energy News Platform

NIMASA seeks amendment to Nigeria’s crude oil trade terms

The Nigerian Maritime Administration and Safety Agency, NIMASA, said it is focused on ensuring that the nation’s crude oil trade terms are changed from the present Free on Board, FOB to Cost Insurance Freight, CIF.

Disclosing this in Benin over the weekend, Director-General of NIMASA Dakuku Peterside, said in a bid to create enabling ground for businesses to grow in the Nigerian shipping industry, the Nigerian Maritime Administration and Safety Agency, NIMASA, will re-evaluate Nigeria’s crude oil trade term, customs duty among others to drive competitiveness.

Peterside who spoke during an interview session with journalists in Edo State said that the agency will continue to engage the Federal Government on the need to create incentives for indigenous ship owners to enable them to compete favourably against their foreign counterparts.

According to him, the agency will change Nigeria’s crude oil trade term from Free on Board, FOB, to Cost Insurance Freight, CIF, including a downward review of customs duty on vessel importation. He said NIMASA will engage the Office of the Vice President to see the need for ship owners to have a special tariff regime.

He said: “I am sure you are aware that NIMASA is pursuing a set of incentives for ship owners in the country. Tariff is just one of the many things we are pursuing in the basket of incentives. We have opened engagement with the Federal Ministry of Finance and Nigeria Customs and their position is that the decision on that is to be made by the highest level of government and so we have commenced engagement with the Office of the Vice President.

“We try to explain to them that if the Nigerian ship owners are going to compete with their peers and the rest of the world within the cabotage regime and the industry, then they must have a special tariff regime. Those who bring in vessels to work for a short term must have a different tariff regime from those who are bringing vessels to the country. So it is not going to be competitive for the Nigerian ship owner and I think that it is receiving attention and they now appreciate the point. We are making progress and very soon there will be some good news for all of us.

“We are also pushing for the change of trade terms and we have addressed the issue to the point that a technical committee has been set up by NIMASA and when the committee has submitted its report, we will advance to engaging the presidency and I know they will support the change of trade terms.”

However, this means that operating under CIF means that a buyer will be responsible for the shipping fees and all other fees associated with getting the goods to its destination as against the FOB terms that place responsibility on the seller.

The NIMASA DG also raised the hopes of ship owners on the disbursement of the Cabotage Vessel Financing Fund (CVFF), saying that the fund will be released in 2019.

When asked why the fund was not disbursed in 2018 as promised, he said, ”We engaged the President concerning CVFF and he raised a number of issues and we have responded to it and I believe that once the President reads the response we have made to the issues he raised, there will be favourable disposition to the disbursement of the CVFF.”