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Hike in petrol price inevitable, says IPMAN

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  • As Govt says N500bn bond is for five years

The speculation about possible increase in price of Premium Motor Spirit, PMS, otherwise known as petrol, may hold some water as the Independent Petroleum Marketers Association of Nigeria, IPMAN, yesterday warned of a threat to product availability in the country.

This came as expert blamed marketers of insensitivity to price moderation when government placed a cap on petrol price in May. But, other operators have argued that the price of petrol was driven by economic variables, which could not be altered for a long time due to foreign exchange challenges.

Speaking to Vanguard, National President, IPMAN, Mr. Chinedu Okoronkwo, said: “But I will advice for total deregulation.

The price moderation, which is the cap placed is not healthy for the petroleum industry to grow. “There are people who have the forex to bring product and sell. By so doing, forexwill crash. But when the industry is over-protected like ours, the current challenges will be unending. Market force should drive the price.

“If the refineries are working to a capacity of 70 percent, the product will not be more than N130 per litre. We should focus on making the refineries work because by the time you keep on importing, forex challenges will keep on recurring and there would no head way.

“The Nigeria National Petroleum Corporation, NNPC, should ensure that the refineries are working and government should grant all support needed to ensure that they work, so the country can avert all of the turbulence hitting the petroleum sector as well as the economy.

“The best way to do that is for the government to hands off, and sometime coming in to intervene when the need arises.” He, however, urged the Federal Government to urgently encourage the setting up of modular refineries in the country as a spur for the refining of crude product.

“The government should encourage the installation of modular refineries in virtually all local government. F ‘’or example, Ivory Coast has one refinery which is old and yet it is working and giving them the satisfaction to an extent,’’ he added.

He noted that the association planned to invest on building a modular refinery to assist refining of the product. “We had brought some investors to Nigeria. In Kogi, we had been given land to build a modular refinery,” he said.

He further called for a good policy in the sector to drive the needed investment for growth. Okonkwo said: “The body language of the government must be seen. An enabling environment should be guaranteed and encouraged for investors to harness.”

In the meantime, the Lagos State Governor, Akinwunmi Ambode, says the N500bn bond approved by the Lagos State House of Assembly will span about five years and not just 2016.

The governor on Wednesday explained that since 2007, Lagos had had two bond issuance programmes, adding that the one approved by the Assembly earlier in the week was the third.

He said for 2016, the state could only draw N60bn from the pool of the approved N500bn, adding that the state would draw from the fund for subsequent years as approved by the House.

He said, “Before you can appropriate it in your budget, you need that programme and the programme was what was approved by the House. What is in the Appropriation Law for 2016 is N60bn. So, it is from the N500bn programme that we are pulling out the N60bn.

“For next year’s budget, if the House approves, for instance, N80bn as bond, we don’t need to go back to the House again after they have approved the budget; you just draw from the N500bn approved programme and take the amount which is approved for the 2017 budget.

“If they approve any amount for the 2018 budget, you take that from the pool of N500bn, which can take the next five to 10 years. It is just a lump. It is not as if the state wants to take another N500bn; it is a requirement by the Securities and Exchange Commission.”

The governor also assured Lagos residents that the N60bn bond approved for 2016 would be used to accelerate the infrastructural development ongoing in the state.

He said, “The fund will be channelled towards the completion of the Ajah Flyover, Abule Egba Flyover, Pen Cinema Flyover, as well as the construction of more lay-bys and bus parks. We will also improve health facilities and build more public schools, among other projects.”

He added that the financial arrangement of the state was such that the bond programme would be easily repayable from the Internally Generated Revenue.

The Assembly had on Tuesday approved N500bn bond, which the government said was necessary for the development of the state.

Vanguard with additional report from Punch

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

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…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. 

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

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

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Wind Farm Vessel Collision Leaves 15 Injured

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…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

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