BusinessDay
Nigeria's leading finance and market intelligence news report.

Why bunkering business remains stagnant in Nigeria

When about three years ago, the Department of Petroleum   Resources came out steaming that it would ensure that legitimate bunkering activities commence in the country, the decision was hailed by oil and gas stakeholders that  were  present at a workshop which was held at Four Point Hotel,  Lagos.

This was because the attendees at the workshop could not just   imagine that Nigeria, a major oil producer and with active ports could be losing money through her own negligence of not being a big player in that line of business.

Now, three years down the line the country remains a   laughing stock as our neighbouring countries that have capitalise on this carelessness  by the   government  are now  making  money  to boost  their Gross Domestic  Product through the revenues that would have ordinarily be for Nigeria.

BusinessDay investigation however revealed that paucity of fund, bureaucratic bottlenecks among inter-government agencies and lack of political will from the government caused the Department of Petroleum Resource not to move ahead with the planned bunkering project in Nigeria thereby making the country to loss colossal sum of money to neighbouring countries.

The DPR had in 2017 said that it was going to facilitate bunkering business in the country after realising that the country was losing huge sum of money to countries like Togo and Benin Republic.

Bunkering is a downstream business involving the fueling of ships of all kinds on the high seas, inland waterways and within the ports. It means vessels coming to Nigeria are able to refuel from the country before going back to the country where they come or vessel passing through the country may stop by to refuel and then move on to its destination.

Fuels to be supplied include Automotive Gas Oil (AGO) or diesel, Low Pour Fuel Oil (LPFO) and Liquefied Natural Gas (LNG).

Bunkering is a legitimate business line that should not be confused with illegal trade in stolen crude for which the same term has been freely used in the Nigerian lexicon.

It was first introduced in Nigeria in 1979, while the licenses were issued by the DPR, but it was later put on hold in 2000, on account of the subsidy on petroleum products which more or less gave the operators windfall profits that did not trickle down to Government.

Revenue generation, as licensing of bunkers including licence renewals, registrations of vessels for bunkering business by the DPR is expected to generate about N250 million yearly.

The stoppage of this activity by DPR has forced vessels that  come to the country as their first place of destination to go after discharging their cargos go to Togo and Benin Republics to refuel. 

 

OLUSOLA BELLO

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