With the introduction of charges Nigerian National Petroleum Company Limited (NNPC), Nigerians should brace up for addition to the pump prize of fuel to above N200 per litre in the coming months. This assumption is based on a N500,000 Ship-to-Ship Coordination Charge for each transshipment operation for petrol, introduced by the NNPC for involving its Marine Logistics.
The charge on any transshipment operation was part of moves by the NNPC to fully recover its operational cost since the recently passed Petroleum Industry Act had made the national oil firm a limited liability company. A memo from NNPC Limited with Ref. NNPC/ML/STS01, dated February 18, 2022, and addressed to all marketers with the heading, “Payment of STS Coordination Charge” signed by O.I O Ajilo on behalf of GGM Shipping, states as follows:
“Please be informed that the NNPC Management has directed that effective February 10, 2022, the sum of Five Hundred Thousand Naira, (N500,000.00) only will be charged for STS Coordination fee for each transshipment operation involving NNPC Marine Logistics. This amount is to cover manpower and logistics required for coordination and production of cargo documents for the transshipment operations. A remita payment request will be generated by our accounts section for each operation to effect necessary payment upon the vessels tendering notice of Readiness, NOR.”
An industry source stated that the process of treating the off-spec PMS is on-going as advised by chemists and analytical laboratories; sludge extracts are being processed and disposed without any harm to the environment. She said that the Petroleum Products Marketing Company (PPMC) brings in cargoes for above process and for distribution to the buying public, but they need to do much more.
Meanwhile, a top industry player noted that a point of serious concern to marketers is that while NNPC Limited and its business units, which are also ‘Limited’ are recovering all their costs by passing same to marketers, there is no approval for marketers to pass these costs to the pump buyer but marketers cannot absorb these costs.
“For instance, a newly introduced cost is the bill of N500k imposed on marketers by NNPC for the ‘daughter vessel’ Bill of Lading / co-ordination fee! Prior to now, marketers charter NNPC vessels and pay in Naira however we are now forced to source US dollars to pay for the charter of NNPC vessels; this is separate from the costs of fenders and other ancillary costs now separated from vessel charter cost which marketers now bear but which we have no approval to pass on to the pump.
“NMDPRA and NNPC have both stated the FG’s reluctance to review pump price but since they have passed them to marketers, the latter will reflect it either ex-depot or at the pumps. Marketers are business owners who mostly operate on bank loans and we too must recover all costs.” the source said.
The NNPC’s cost recovery drive through the new transshipment charge, it was learnt, made depot owners to raise the ex-depot price of petrol, a development that has forced marketers to increase the PMS price above the approved cost of N142-N145/litre. Most private depot owners recently raised the ex-depot price of petrol from the approved N142-N145/litre price to between N162 and N170/litre.
This made many filling stations owned by independent marketers to dispense petrol above the approved price, as they stated that the cost of the commodity would exceed N180/litre in most retail outlets soon, except in mega stations and those owned by major marketers. Independent oil marketers in Nigeria operate about 90 per cent of the filling stations across the country.
In another document titled, “Commencement of STS Coordination Charge,” which was from the General Manager, Marine Logistics, to marketers, with reference GGM/ML/04, and dated February 8, 2022, the national oil firm explained the functions of Marine Logistics. It said its functions were to coordinate ship-to-ship transshipment activities for the Pipelines and Products Marketing Company, NNPC Retail Limited and third-party marketers, as well as facilitate the processing of clearances for shuttle vessels and preparation of Bill of Lading on completion of STS.
Marine Logistics, PPMC and NNPC Retail Limited are subsidiaries of the national oil company. The document, which was signed by Asuquo Inuikim, read in part, “Kindly recall that customers (PPMC, NNPC Retail and third-party marketers) who hire ML (Marine Logistics) vessels for STS and discharge operations are charged STS fees which is included in the vessel freight. However, third-party marketers who do not hire Marine Logistics vessels are serviced free.”
