Proposed Nigerian fleet: SOAN task FG on oil freight policy

As part of efforts to make the planned Nigerian fleet (national carrier) successful, with generous availability of Nigerian cargoes, the Ship Owners Association of Nigeria (SOAN) has called on the Federal Government to begin consideration of the existing free on board (FOB) oil freight policy with the intention of changing it to cost, insurance and freight (CIF).

According to the president of SOAN, Engr Greg Ogbeifun, this will ensure that the national fleet when established will have oil cargoes to lift to buyers from the Nigerian government.

Speaking with SHIPS AND PORTS DAILY on the ways to achieve success with the planned national fleet, Ogbeifun who is the chief executive of Starz Marine Services and a member of the committee for developing modalities for the establishment of the Nigerian fleet, said the government would need to aid the shipping line with critical incentives to include a friendly tax policy and reversal of existing free on board (FOB) policy on oil freighting to cost, insurance and freight (CIF).

He said, “I think what government can do to help the emergence of the Nigerian fleet is one, to look at the critical incentives, to look at tax policies that we have; to look at all it takes to make the operation of a fleet easier than how it has been. For example, at the moment, if you look at the policy for the freighting of Nigerian crude, it is on the free on board (FOB) policy.

“Now we are all suggesting and rightly so that should look at reviewing that policy to make it cost insurance and freight (CIF) because that is the only way, a Nigerian fleet can be engaged to participate in the carriage of Nigerian crude to the buyers. That is one major area the government can look at to help the emergence of a Nigerian tanker fleet for example.”

Ogbeifun clarified that the committee that was set up was asked to develop modalities for the establishment of a Nigerian fleet and not a national carrier, stressing that it is very important to clarify that a Nigerian fleet is not the same as a national carrier.

“In terms of whether it is a good idea, I like to state that it is a laudable idea and it should be supported and encouraged if the country can once again develop a Nigerian fleet, which means it doesn’t have to be one company or two companies, or one fleet. As many entities as can set up a fleet that will be registered in Nigeria and will participate in international trade should be encouraged. I think it’s a good idea for various reasons.

“First of all, it will enable the country to participate in the afreightment of both our import and our export that will help the economy; that will create job opportunities and of course, that will create a platform for again, training the Nigerian seafarers to international standards,” he said.

The SOAN boss maintained that the proposed Nigerian fleet would not be a drainpipe, as feared in some quarters, insisting that the Federal Government has no plans to invest public funds in the project.

“As far as I know, the government through the Minister for transportation, has made it very clear that any Nigerian fleet evolving will be 100 per cent private sector-owned and private sector-driven, so government will not be involved in any form. What is happening now is that government is working to encourage private sector to work towards re-establishing Nigerian fleet. As far as I know, government has no intention of funding that fleet, whatsoever. So the issue of drain pipe does not arise at all,” he maintained. 

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