Ship owners and other stakeholders in the maritime sector may get the desired change in trade terms from Free On Board (FOB) to Cost Insurance and Freight (CIF) which will enable them to lift crude and boost capacity.
The development is a fallout of the stakeholders' engagement on changing Nigeria's crude oil affreightment trade terms from FOI to CIF. The event was organised by the Nigerian National Petroleum Corporation (NNPC) and the Nigerian Maritime Administration and Safety (NIMASA) yesterday in Abuja.
Minister of State for Petroleum, Dr. Ibe Kachikwu who declared the event open welcomed the development. He noted that the issue was an age-long challenge. He charged participants to come out with resounding resolutions that would be of national benefit.
The Director General of NIMASA, Dr. Dakuku Peterside, who presented a paper titled "The Imperatives of Changing Nigeria's Crude Oil Affreightment Trade Terms From FOB to CIF" stated that the changing landscape of Nigeria's maritime sector viz-a-viz its security architecture, capacity and other determinants necessitated the change now than ever before.
He said the CIF, if implemented, would encourage indigenous fleet expansion, lead to massive job creation for qualified Nigerian seafarers, create opportunities for mandatory sea time experience for Nigerian cadets and build expertise and competence in international shipping trade.
"Nigeria is one of the major exporters of oil and gas resource in the world, and she averages an output of 1.92 million barrels of crude oil per day, so this volume generates huge freight for carriers. Regrettably, indigenous shipping operators have insignificant share of the freight earned from the carriage of Nigeria's crude compared to foreign counterparts," the DG lamented.
Dakuku also stated that members of Organisation of Petroleum Exporting Countries (OPEC) such as Iran, Indonesia, Algeria, Kuwait, Angola, Venezuela, UAE and Libya allow indigenous operators to participate actively in shipment of crude oil. He said that with the right policies in place, Nigeria could build its own capacity through the change of terms of trade for Nigeria's benefit.