The Senate on Tuesday frowned at the $120 million annual revenue loss to overwhelming patronage of foreign shipping firms in the shipment of petroleum products into the country.
The annual revenue loss was revealed at a meeting between the Senate Committee on local content, the management of the Nigerian National Petroleum Corporation and Ship Owners Association of Nigeria.
The lawmakers therefore directed the Nigerian National Petroleum Corporation to initiate the processes of patronising and boosting the capacities of indigenous shipping firms.
The lawmakers disclosed that the overwhelming preference for foreign firms had resulted in huge revenue losses, including some $120 million loss to demurrage.
The Chairman of the committee and former Senate Leader, Teslim Folarin, after exhaustive discussion directed that the NNPC should allow local ship owners operate in the transportation of petroleum products.
The committee equally stated that there is the need to help build capacities among indigenous shippers.
Folarin said: “It is very important we patronise Indigenous shipping.
“The whole essence of this investigative hearing is not to trade blames.
“We understand that they don’t have enough vessels, they don’t have capacity and capacity cannot come from heaven.
“The GMD here has capacity to help build capacity.
“It is very important that we patronise indigenous shipping companies.”
The Senate panel decried the disregard to the local content act which stipulated among others that local firms be encouraged in the conduct of businesses of any public company businesses.
Another member of the committee, Senator Solomon Adeola, who is also the Chairman of the Senate Committee on Finance, disclosed that the failure to carry Indigenous shipping companies along had dealt serious economic blow on the country.
Adeola dismissed submissions that Nigerians do not own vessels that could be patronised.
He said: “There are local vessels owned by Nigerians.
“It depends on the type of vessels we are talking about.
“There are two types of vessels.”
The Group Managing Director of the NNPC, Mele Kyari, who had informed the committee earlier that there was no Indigenous vessel to patronise, assured the Senate: “I am going to work to support these companies.
“We will engage our partners.”
In a presentation to the committee earlier, SOAN, led by its President, Dr. Mkgeorge Onyung, told the committee that the provisions of Nigerian coastal and local content laws with regards to the shipping of petroleum products in the downstream sector of the oil industry is being breached in favour of foreign vessels, a situation it stated had encouraged massive capital flight.
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