Stakeholders in the downstream sector of the Petroleum industry has advocated that payment of charges in foreign currencies by indigenous operators to government agencies like the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Ports Authority (NPA), the Department of Petroleum Resources (DPR) and others be stopped forthwith.
In a communique issued at the end of the 10th Oil Trading and Logistics (OTL) Africa Downstream Week, held on 23-26 october, 2016 at Lagos Oriental Hotel, Nigeria, the stakeholders also suggested that the Naira be prioritized as a means of exchange to maximize the value to ship owners and improve competitiveness at the ports.
Signed by Mr. Reginald Stanley and Mr. Emeka Akabogu, Esq., Chairman OTL Africa Advisory Board and Chairman OTL Africa Downstream respectively, the Communiqué harped on the need to urgently review the administration of the current ineffective foreign exchange intervention in the downstream sector in view of the timing gap between the offer of forex and the opening of Letters of Credit, which often erodes the value and usefulness of the offer.
It stressed that to encourage increased local and foreign investment in the downstream, government must prioritize enthronement of a stable and predictable foreign exchange policy calling on the Central Bank of Nigeria, Federal Ministry of Finance and Ministry of Petroleum Resources to jointly address this as a matter of urgency.
It maintained tha financial institutions should be encouraged to develop special lending arrangements that would allow players in the downstream sector access funds at single digit interest rate to facilitate and sustain growth.
“To streamline policy interventions, inter-agency collaboration between key branches of Government is strongly advocated and Government should identify supervisory mechanisms to harmonize policy engagements.
“There is need for government intervention by way of policy on LPG to facilitate its growth and make it easily available and accessible.
“Government should urgently adopt a policy of low sulphur fuel specifications Afri-4&5 to protect the health of our people and the environment.
“Government needs to reduce the duty payable on the acquisition of vessels by indigenous operators to make them competitive with their foreign counter-parts”, the Communiqué read in part.
The communiqué further called for the full liberalization and deregulation of the downstream oil sector, with removal of all hindrances and bottle necks which it said was key for the improvement of private investment and market competitiveness even as it sued for a mitigating policy that would best serve the public and cushion the effect thereof.
It continued, “It is imperative to establish and empower a strong independent regulator to oversee activities in the subsector and ensure implementation of open and transparent rules for the downstream value chain.
“To minimize or eliminate oil theft, security measures such as the Oil and Gas Protection Squad should be implemented as soon as possible, together with full deployment of technology and observance of international monitoring standards.
“Government and private investors are encouraged to explore and undertake shared infrastructure to ease movement of products particularly trans-regional pipelines and rail connections.
“Government should expedite the passage of the Petroleum Industry Bill which should cover full deregulation of the downstream sector”.
It therefore pointed out that the Cabotage Act as well as the Local Content laws needed to be optimized in implementation by NIMASA and other regulatory bodies in the downstream sector so as to ensure more participation of Nigerians.
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