NNPC begins trans-shipment charges, depot owners raise fuel price

The Nigerian National Petroleum Company Limited has introduced a N500,000 Ship-to-Ship Coordination Charge for each transshipment operation for Premium Motor Spirit, popularly called petrol, involving the NNPC Marine Logistics.

It was gathered on Monday that this 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.

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.

There was report on Monday that the cost of petrol might hit or exceed N180/litre in most filling stations in coming weeks if nothing was done about the hike in its ex-depot price by depot owners. The approved pump price of petrol currently is N162-N165/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.

Documents seen by our correspondent in Abuja on Monday showed that the rise in ex-depot price for petrol was because the NNPC had just introduced the Ship-to-Ship Coordination Charge for each transshipment operation.

In a letter from the NNPC, with reference NNPC/ML/STS01, dated February 18, 2022, and addressed to all marketers, the national oil company explained that the charge would cover manpower, logistics, among others.

The letter, which was titled, “Payment of STS Coordination Charge,” and signed by O.I.O. Ajilo, for the NNPC’s Group General Manager, Shipping, read in part, “Please be informed that the NNPC management has directed that effective February 10, 2022, the sum of N500,000 will be charged for STS Coordination fees for each transshipment operation involving the NNPC Marine Logistics.

“This amount is to cover manpower and logistics required for coordination and production of cargo documents for the transshipment operation.

“A Remita payment request will be generated by our accounts section for each operation to effect necessary payment upon the vessel’s tendering Notice of Readiness. Thank you for your anticipated cooperation and understanding.”

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.”

Commenting on the development, a depot owner told our correspondent that the NNPC was currently out to recover all its cost despite the fact that the sector had not been fully deregulated.

The development, he stressed, led to the recent hike in ex-depot price for petrol.

“When everyone is accusing marketers of increasing ex-depot price, who will protect and defend marketers from costs such as above?,” the marketer, who pleaded not to be named to avoid being victimised, stated.

The source added, “The NNPC business units have been singing songs like ‘since we are now a limited liability entity, all costs must be fully recovered’.

“And with that, several costs such as the above have been imposed on marketers since the signing of the PIA 2021, yet the sector is not fully deregulated to enable marketers recover these costs being imposed on marketers.”

Another depot owner explained that there were additional costs being borne by marketers, such as the unofficial exchange rate of the dollar by the Nigerian Ports Authority and the Nigerian Maritime Administration and Safety Agency.

The source said, “These costs are borne by marketers with the imposed unofficial dollar exchange rates by the NPA and NIMASA, which are charges on marketers’ vessels, as both insist on being paid in foreign exchange, which is never available at the official Central Bank of Nigeria rate but is sourced at the parallel market.”

On whether depot owners had raised these concerns with the necessary authorities in the oil sector, the source replied, “Marketers have escalated these to the highest level.

“Presidency gave instructions for the reversal of the dollar invoices but the NPA and NIMASA refused to comply. These are just few of the reasons why some depots sell above official rates. They are simply recovering their costs just like the NNPC Limited!”

The source added, “Imagine to issue BL (Bill of Lading) costs N500,000! They don’t process approval for private vessels; they do that only for vessels on time charter with the NNPC, yet they charge us N500,000!”

The depot owners insisted that they had no option but to recover their cost, stressing that the pump price of petrol would definitely rise beyond the N165/litre approved price at filling stations should the current situation persist.

The NNPC’s spokesperson, Garba-Deen Muhammad, said he was not aware of the increase in ex-depot price for petrol, while his counterpart in the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Kimchi Apollo, said independent marketers should tender a formal complain to the NMDPRA.