The Senate on Wednesday resolved to investigate the actions of the Nigerian National Petroleum Company in ensuring participation of indigenous companies in the freight of petroleum products, in line with the provisions of Presidential Executive Order 5(2018).
This was predicated upon a call by Senator Ramoni Olalekan Mustapha seeking an investigation into the breach of Nigerian laws by foreign vessels in coastal shipping of petroleum products in the downstream sector of the Nigerian Maritime University.
Senator Olalekan Mustapaha (APC, Ogun East), 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.
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 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 fifteen 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.
He stated that the Capital freight spent by NNPC through Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP) is approximately USD$60 million monthly to about 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 amount for one hundred percent of freight associated with this downstream activity, most of which is repatriated overseas to the detriment of the Nigerian economy”, Senator 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 the Committees on Local Content & 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 Upper Chamber further resolved to investigate foreign ship owners of freight associated with downstream activities repatriated overseas by NNPC to the detriment of the local economy or patronage.
Also to be investigated is the flagrant abuse of the NOGICD Act 2010 and Cabotage Act 2003 respectively, by the operators and stakeholders in the Maritime Industry, through a ship-ship transfer with the coastal foreign vessel.
In its motion on Wednesday, the Senate mandated the Committees on Local Content and Petroleum Downstream to carry out an investigation with a view to unraveling the influx of foreign vessels in the coastal region and the level of patronage of Nigerian shipping companies.
Meanwhile, members of the Senate on Wednesday considered a motion on the ‘escalating rate’ of unemployment in the country.
The motion was sponsored during plenary by the immediate past Deputy President of the Senate, Senator Ike Ekweremadu.
In their resolution, the lawmakers proffered solutions to the executive arm of the government for adoption and implementation.
One of these is for the Federal, State and Local Governments to declare emergency on the provision of employment across the country.
The senators also called on the Federal Ministry of National Planning to put the necessary mechanism and programmes in place to achieve this.