Nigeria is losing about $500 million annually due to the usage of Free on Board (FoB), a trade policy in the lifting of crude oil that have been faulted by experts, Indepth Africa reports.
Managing Director, Badmus Shipping Company, Chief Fola Badmus disclosed this in an interview with The Nation.
FoB specifies which party (buyer or seller) pays for the shipment and leading costs, and/or where responsibility for the goods is transferred.
He stressed the need for the Federal Government to adopt Cost, Insurance and Freight (CIF) for the lifting of crude oil.
CIF is a trade term which requires the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.
Other stakeholders that back the CIP policy include President, Indigenous Ship Owners Association (ISAN), Chief Isaac Jolapamo and maritime lawyer, Mr Seye Adetowubo.
Local ship owners said some oil and gas transactions, amounting to billions of dollars are carried out every year under CIF contracts. They noted that Nigeria was losing out because of the non-involvement of local ship owners in crude oil lifting.
Badmus said substantial part of the problems faced by indigenous owners was due to the failure to enforce the Nigerian Maritime Administration and Safety (NIMASA) Act, 2007 five years after its enactment.
Finance and banking credit facilities, Adetowubo said, are much easier to arrange under the CIF policy stressing that buyers stand the chance of benefiting a lot from the easier finance and credit facilities. The Nation
Managing Director, Badmus Shipping Company, Chief Fola Badmus disclosed this in an interview with The Nation.
FoB specifies which party (buyer or seller) pays for the shipment and leading costs, and/or where responsibility for the goods is transferred.
He stressed the need for the Federal Government to adopt Cost, Insurance and Freight (CIF) for the lifting of crude oil.
CIF is a trade term which requires the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier.
Other stakeholders that back the CIP policy include President, Indigenous Ship Owners Association (ISAN), Chief Isaac Jolapamo and maritime lawyer, Mr Seye Adetowubo.
Local ship owners said some oil and gas transactions, amounting to billions of dollars are carried out every year under CIF contracts. They noted that Nigeria was losing out because of the non-involvement of local ship owners in crude oil lifting.
Badmus said substantial part of the problems faced by indigenous owners was due to the failure to enforce the Nigerian Maritime Administration and Safety (NIMASA) Act, 2007 five years after its enactment.
Finance and banking credit facilities, Adetowubo said, are much easier to arrange under the CIF policy stressing that buyers stand the chance of benefiting a lot from the easier finance and credit facilities. The Nation