The Principal Partner, Akabogu and Associates, Barr. Emeka Akabogu has described the oil price fall in the international oil market as an opportunity as well as a disincentive for the maritime sector in Nigeria.
Akabogu who made this assertion in an interview with newsmen in his office in Lagos stated that the trend could be said to be a disincentive owing to the fact that with the devaluation of Naira, importers may need a lot of Naira to get the dollars since they needed dollar for foreign exchange to import goods into the country.
He said,” so, the evident impact ordinarily should be a reduction of import which really is good for the country that is what you will consider to be its immediate impact. Whether that will actually happen is remained to be seen”.
“If indeed there is a reduction of import, there will be reduction of activities around the ports, there will be reduction in the volume of cargo that we see coming through the ports, there will be reduction in the volume of the revenue profile of the government, there will be a reduction in the volume of income to the operators within the ports. So, that is the little negative that it will have on that side”.
Akabogu who is also the Managing Director and Chief Executive Officer of the Admiralty Resources Limited noted that on the other hand, if there was to be more effective regulation of the maritime industry in Nigeria, the trend would present a lot of opportunity in the industry.
According to him,” that way, people will have improved confidence in the system. When there is improved confidence and knowledge that the system can protect me, then, people can invest more because there is trust knowing that there is effective regulation that protects their interest as ship owners will invest more on ships. You can have a possibility that Nigerians can gain more from shipping”.
“If Nigerians earn more in shipping, it will significantly reduce the effect of what you see in the reduction of oil price. Now the second aspect of it is that, we have been saying over the years that the Nigerian crude oil should be sold on C and F basis or CIF. So it could be Cost and Freight or Cost, Insurance and Freight as opposed to the current situation where it is sold on FOB (Free-On-Board)”.
“Now, the effect of what is happening with the reduced oil price now is that it could be used as a good opportunity for both sides to introduce the CIF policy for the movement of oil”.
He however suggested that what the country needed to do more now was to embark on aggressive marketing of the Nigeria’s crude oil so as to guarantee marketing more of the nation’s crude as it had became more of buyers’ market than the sellers’ market.
“So, it is incumbent on the marketing team of NNPC (Nigeria National Petroleum Corporation) to flavor the proposition that Nigeria had with the buyers’ proposition so that the buyer sees himself possibly paying a reduced cost for the cargo and for delivery as opposed to what they would have been used to”.
“If this could happen and we could flavor our crude oil with the intensive delivery at a reduced rate, then, we can empower Nigerian operators, the Nigerian ship owners to deliver Nigeria’s crude. That way, you are not only selling more crude and gaining more market but it means you are empowering more Nigerians”, he said.
