Home Business Shipowners’ association advocates new mode of sale of crude oil

Shipowners’ association advocates new mode of sale of crude oil


Lagos- The Nigerian Indigenous Shipowners Association (NISA) on Monday urged the Federal Government to change its transaction of crude oil from Free on Board (FOB) to Cost Insurance and Freight (CIF).

The association’s President, Capt. Niyi Labinjo, told the News Agency of Nigeria (NAN) in Lagos that the CIF mode would add more value to the business.

Labinjo said Nigeria was the only country among the Organisation of Petroleum Exporting Countries (OPEC), still selling crude oil based on FOB.

“The time has come that Nigeria has to change our transaction mode from Free On Board to Cost Insurance and Freight.

“We need to do that; that way we would have been adding value because we will get value for the insurance; we would also get value for the freight.

“Before 1976, the entire insurance companies in Nigeria had only 316 employees but because of the government of the day’s position that all insurance policies must exhaust Nigerian insurance available locally before you will ship anything abroad, between that time and 2012, the business of insurance increased from N16 million to N16 billion.

”And from a number of employees that you can count on your finger tips to over 3 million employees.

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“So we have no option; we have to encourage the growth of our own economy.“

He expressed concern about the high cost of doing business in the country, saying that ”the cost of doing business in Nigeria is one of the highest in West Africa”.

Labinjo also urged the Federal Government to include maritime industry among those sectors that were getting tax incentives.

“If after a100 years of existence as a country, we are yet to get our maritime policy right, then something is wrong with us. It is not because we don’t have good laws.

“We have very fantastic laws. Cabotage law is one of the best.

“NCD law is fantastic; Nigerian Merchant Shipping Act; NIMASA Act very good. So what is our problem?

“I called my colleagues in India, in Greece, in Turkey and I was sharing with them. I said, ‘what do you do to foreign shipping companies who flout your Cabotage law?’

“They said, ‘no, no, no, no’, that nobody can flout their Cabotage Law; that it is unthinkable that a foreign ship will come and take over their Cabotage trade.

“So they don’t even have to think about it. There is no provision for such a vessel because they will not… Why would they not?

“Several reasons are responsible. “

He stressed the need to improve on monitoring in order to properly identify any ship coming into the country. (NAN)

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