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 low level of patronage of Nigerian ships, which has led to the collapse of indigenous shipping companies.
The upper legislative chamber directed the committees to investigate the flagrant abuse of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act 2010 and the Coastal and Inland Shipping Act (Cabotage Act) 2003 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 Nigerian National Petroleum Corporation (NNPC) to the detriment of the economy.
These were resolutions reached by the red chamber 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 downstream sector of the Nigerian maritime industry.”
Sponsor of the motion, Senator Olalekan Mustapaha (APC, Ogun East), noted that the 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.
“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.
“Only wholly-owned, manned and registered Nigerian vessels can engage in the domestic coastal carriage of petroleum products within the territorial and inland waterways,” Mustapaha said.
He said that over the past 15 years, indigenous tonnage capacity and coastal shipping capabilities have grown exponentially with Nigerian operators owning multiple tanker vessels in their fleet.
The lawmaker said 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.
He stated that the capital freight spent by NNPC through direct sale of crude oil and direct purchase of petroleum product is approximately USD$60 million monthly, amounting to USD$720 million annually.
“The value of DSDP for 2019/2020 contract period is at the range of USD$9 billion, out of which foreign ship owners account for one hundred percent of freight associated with this downstream activity, most of which is repatriated overseas to the detriment of the Nigerian economy,” Mustapha lamented.
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.