Nigeria loses $120m to demurrage annually on imported fuel

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The federal government is currently counting significant losses arising from demurrage paid by vessels which bring in imported petroleum products into the country. Available statistics show that the country pays $120 million annually on demurrage due to infrastructural constraints, Leadership reports.

It was learnt that major marketers who augment importation of products into the country reportedly build the cost into final receipts issued to the Nigerian National Petroleum Corporation (NNPC), which bore the additional cost so that pump price stays at N145 per liter for Premium Motor Spirit (PMS) also called fuel. Speaking on the constraints and huge costs to operators, the executive secretary of Depots and Petroleum Products Marketers Association (DAPPMA), Olufemi Adewole, said at present only MRS, Yinka Folawiyo and Atlas Cove have the capacity to receive some ocean going vessels. He said the problem with existing jetties is that their drafts are very shallow with limited capacity to hold only lighter vessels.

Adewole complained the 127 jetties in Nigeria have insufficient capacity to service the needs of the country, posing a major challenge for imported vessels trying to discharge at the port. Also speaking, Mr. Dolapo Oni, head energy desk of Ecobank Plc said the country should focus on expanding capacity of jetties since they are key to receiving vessels bringing products. “I think we need to concentrate energy and Investment in that area so that by the time we attain self-sufficiency on in country refining and begin to export as envisaged by government these facilities would be ready to support such projects” he said.