The Senate on Wednesday mandated its Committees on Local Content Legislative Compliance and Petroleum Downstream to investigate the influx of foreign vessels into Nigeria’s coastal region and the level of patronage of Nigerian shipping companies.
Sponsor of the motion, Senator Olalekan Mustapaha (APC, Ogun East), put the value Nigerian National Petroleum Corporation’s Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP) for 2019/2020 contract period at about $9bn.
Sadly, he lamented, of this amount, “foreign ship-owners amount for 100% of freight associated with this downstream activity, most of which is repatriated overseas to the detriment of the Nigerian economy.”
According to the lawmaker, “The influx of foreign vessels into the Nigerian downstream sector is alarming against the Coastal and Inland Shipping (Cabotage) Act 2003 which clearly restricts vessels engaged in domestic coastal trade.”
He noted that the National Content (NOGICD) Act 2010 was enacted to promote value addition to the National Economy by stimulating growth and industrial development in the Oil and Gas Sector of the Economy.
The upper chamber, therefore, directed the committees to investigate the flagrant abuse of the NOGICD Act 2010 and Cabotage Act 2003 respectively, by operators and stakeholders in the Maritime Industry.
The Senate also resolved to dig into foreign ship owners of freight associated with downstream activities repatriated overseas by the NNPC to the detriment of the economy.
The resolutions were sequel to the consideration of a motion on the “Urgent need to investigate the breach of Nigerian laws by foreign vessels in coastal shipping of petroleum products in the downstream sector of the Nigerian maritime industry.”
He added, “Only wholly-owned, manned and registered Nigerian vessels can engage in the domestic coastal carriage of Petroleum products within the Territorial and Inland Waterways.”
Senator Mustapha said that over the last 15 years, indigenous tonnage capacity and coastal shipping capabilities have grown exponentially with Nigerian operators owning multiple tanker vessels in their fleet.
The lawmaker stated that though NNPC is the largest employer of downstream shipping services in Africa, the corporation’s activities in terms of opportunities and indigenous capacities have not been enhanced.
The lawmaker added that the lack of Contract of Carriage and the absence of guaranteed cargo tonnage in the Maritime Industry have led to significant loses and collapsed of domestic and indigenous shipping.
Consequently, the Senate, in its resolutions, mandated its Committees on Local Content; Petroleum (Downstream); and Legislative Compliance to investigate the reasons for the dominance of foreign vessels above locally owned, manned and registered vessels in the domestic carriage of petroleum products within the coastal territory and Inland waterways of Nigeria.
The resolutions were sequel to the consideration of a motion on the “Urgent need to investigate the breach of Nigerian laws by foreign vessels in coastal shipping of petroleum products in the downstream sector of the Nigerian maritime industry.”
