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FG’s new policy will break oil and gas monopoly — Oditah

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By Udeme Clement

The recent Federal Government’s policy clarification on ports industry aims at eliminating monopoly has been described as an initiative that will engender competition in the system, in order to create thousands of jobs for economic growth and development.

A policy analyst and Senior Advocate of Nigeria (SAN)  Prof, Fidelis Oditah, said this in a chat with pressmen, stressing that the new policy giving importers the right to use any terminal of their choice for discharge of cargoes is in tandem with the current administration’s reform to enhance Foreign Direct Investments (FDI) inflow in oil and gas sector.

Oditah also a legal adviser to Lagos Deep Offshore Logistics (LADOL), a foremost indigenous establishment, who had earlier kicked against the monopoly said, “Following the policy clarification, Ladol that had obtained an injunction restraining former President Goodluck Jonathan from implementing his policy directive of 20 April 2015, has filed an application at the Federal High Court, Lagos seeking to withdraw its proceedings against the government”.

Sunday Vanguard gathered that on May 10, 2017, the Federal government through Nigerian Ports Authority (NPA) conveyed its recent position in a letter titled: “Conveyance of presidential approval  reports on concessioned terminals in the Ports”, signed by the Executive Director, Engineering and Technical Services of NPA,  “The Federal Government of Nigeria (FGN) remains guided by global best practice in designation of Terminal/ Port operations into three broad categorisation of bulk cargo, container cargo and multi-purpose cargo. FGN rejects categorisation of oil and gas multi-purpose cargo terminal, as this is alien to relevant concession agreement and inconsistent with global shipping practices”.

The letter added, “FGN reaffirms past presidential directives that all importers are free to choose any terminal or port for discharge of their cargoes, subject to the presence of all requisite regulatory agencies at such ports as required by extant regulations and in line with its policy of promoting competition and value for money. Consequently, any policy that designates certain ports by cargo types is hereby cancelled”.

Describing the development as laudable, Oditah said,  “The clarification is a reaffirmation of the FGN policy articulated by ex-President Olusegun Obasanjo in 2006 and late Yar’Adua in 2008, that all importers are free to choose any terminal for the discharge of their cargoes. This will no doubt increase private investment in building port infrastructure along our vast coastal belt, especially in investment in Western Ports, oil and gas facilities in the West, particularly Lagos, to enhance job creation and growth of Gross Domestic Product (GDP).  The essence of a market economy is to create opportunities, facilitate competition and guarantee consumers’ choice.  The clarification means that International Oil Companies (IOCs) have a choice regarding the procurement of oil and gas logistics services, especially for deep offshore operations.  The policy clarification was necessitated by the confusion created by the directive of President Jonathan in the twilight of his administration in 20 April 2015,  that all oil and gas cargoes    must go to three Eastern ports of Onne, Calabar and Warri controlled by one concessionaire, before being transported to their ultimate destination. That policy, which was inimical to the interests of Nigerians resulted to increase in the amount of subsidy provided by government, thereby wasting public resources. It created an unhealthy monopoly in favour of a concessionaire, stifled consumer’s choice and deprived consignees of oil and gas coming into Nigeria the freedom to choose the port for discharge of their cargoes.”

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