Connect with us

Archives

Crude Price Crash: Port users in quandary over Government’s next action

Published

on

…As OPEC vows not to change output even if price drops to $40

Nigerian Port users are now in quandary over the ongoing southwards slide, in the price of crude petroleum, with many wondering if Government would also effect a corresponding slide in fuel pump price in Nigeria.

President Jonathan Goodluck

President Jonathan Goodluck

Their confusion became audible, sequel to a galloping downward slide of the item in the international market, which puts the Brent, on a five-year low of $63 per barrel, even as pump price in the United States of America, crashed by over $1 per gallon.

Some however wondered if Government would not punish them for the slide, by further raising the pump price, essentially, to enable government create a new base for revenue generation, now that earlier hopes and projections, targeting bumper revenue generation from crude export has collapsed.

Specifically, some of them wanted to know if the usual threat of pump price hike, especially around Christmas and the New Year, would still be tenable, based on stale arguments, often anchored on “subsidy removal”.

“Do you know how many times they have hiked pump price around Christmas and the New Year? And do you recall that their normal excuse was usually anchored on subsidy removal? For some of us, the Christmas comes with a tingling fear of fuel hike in the background”, the importer, who simply identified himself as Adegbola indicated, asking whether any excuse, based on subsidy removal or international pricing system was still tenable.

Speaking in the same vein, another port user, Ben Ugonna expressed his fears, that he had hoped that by now Government would have come out to clear the air or something, stressing that when products went scarce in several petrol stations last week in Lagos, he immediately began to pray,not knowing whether it was the usual artificial scarcity at Christmas seasons, followed by black-market sales and finally a hike that was initiating.

“For some of us who travel home at Christmas, we are very much used to it; one day fuel is there, the following day small queue would begin; the small queue would turn into snakes, and those who can’t queue would start buying black-market along Ikorodu Road!

“We are used to it. But I just hope that this time around, somebody in Government would say something. Anything. Let them at least tell us that they are on top of it, and that Nigerians would not be punished, for the slide”, he said.

But an industry watcher, Anthony Emeordi advised that Nigerians should keep their peace, noting that if Government hiked pump price when crude price in the international market was high, claiming varying degrees of subsidy removal, it should not lack the moral courage to slide the pump price now, after all, pump price in the US has similarly crashed, by over a Dollar.

“I am expecting fuel pump price to crash any time from now. This Government is a highly responsible one. I also know that it does not sell fuel; it only ensures it is available. So, if it protected Nigerians from fuel merchants and importers, by offering subsidy, I see no reasons why it should not further protect the citizens, now that the marketers would equally be buying their cargo more cheaply, from where ever they have been buying”, he said, stressing that Nigerians must nevertheless be on the alert, to ensure that the fuel importers do not continue to sustain the present pump price, on the ground that they must first deplete their old stock, before favourably, altering fuel prices.

It may be noted that price crash in the international market may not be unconnected with the discovery of new shale of crude petroleum in the US and elsewhere, new technological breakthrough which has made it possible for the US to pump out product, faster than its local market had hitherto experienced; and thirdly, the un-willingness on the part of OPEC members, to slash product supply and stabilize prices.

Meanwhile, OPEC will stand by its decision not to cut crude output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.

OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. OPEC is due to meet again on June 5.

“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” Mazrouei said current conditions didn’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

The U.A.E. hasn’t been informed of any plan for an emergency meeting, Al-Mazrouei said. OPEC Secretary-General Abdalla El-Badri said, “we don’t know,” when asked at the same conference about the possibility of such a meeting.

Brent crude, a pricing benchmark for more than half of the world’s oil, slumped 2.9 percent to $61.85 a barrel in London on Dec. 12, for the lowest close since July 2009. Brent has tumbled 20 percent since Nov. 26, the day before OPEC decided to maintain production. U.S. West Texas Intermediate crude dropped 3.6 percent to $57.81 in New York, the least since May 2009.

The 12 members of the Organization of Petroleum Exporting Countries pumped 30.56 million barrels a day in November, exceeding their collective target for a sixth straight month, according to data compiled by Bloomberg. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a global supply glut.

(Additional reports from Bloomberg)

Continue Reading
Advertisement Simply Easy Learning
3 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

5 × two =

Archives

WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

Published

on

…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

Continue Reading

Archives

Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

Published

on

The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

Continue Reading

Archives

Wind Farm Vessel Collision Leaves 15 Injured

Published

on

…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

Continue Reading
ADEBAYO SARUMI: Doyen of Maritime Industry Marks 80th Anniversary, Saturday 

Editor’s Pick

Politics