Headlines

EU sanctions may put $16b hole in Russia’s tanker fleet

Russia may have to expand its own tanker fleet and attract more tonnage from non-western owners in order to keep moving oil after upcoming EU sanctions – and the details suggest that it will be costly.

In a market report released Friday, shipbroker Gibson said that it expects that more than 200 tankers may have to exit Russian trades before December 5, when the EU’s Russian oil shipping ban (or, if revised, a “price cap”) goes into effect. “It is reasonable to assume that there might be insufficient tonnage to transport Russian oil to market, particularly given that those barrels currently traded to Europe will have to be redirected longer haul,” predicted Gibson.

If the Russian fleet is undersupplied after the departure of western tonnage, sale & purchase deals could rebalance the trade by transferring more ships to parties willing and able to work with Russia. This may already be happening: Gibson counts roughly 100 Aframax and Suezmax sales this year to buyers who would not be affected by EU restrictions, and 40 more VLCC sales.

This ownership shift may be visible in the ice-class tanker fleet, where vessels have changed hands at a rapid clip this year. About four million dwt worth of ice class tanker tonnage – more than 40 ships – were sold over the summer, a Gibson broker told Bloomberg last month. This winter, these vessels will be needed to get Russian oil out of the Baltic from the busy terminals near St. Petersburg.

As it stands today, tanker broker Braemar believes that Russia will come up short by about 70 Aframaxes and 35 Suezmaxes. Filling that gap may be costly, the head of Russia’s second-largest bank said last week.

“According to our estimates, only the tanker fleet expansion may require at least [$16 billion] in the near time. Amid the absence of external financing and limited financial flows of the companies, the role of banks in the attraction of required investments will only increase,” said VTB chairman Andrey Kostin, according to Piter.TV and PortNews.

Economy

Prices of cooking gas to crash as federal government exempts LPG, allied products from Customs duty,VAT

The Federal government has directed that imported Liquefied Petrolium Gas(Cooking gas) and all its allied equipment like cylinders should be excepted from the payment of Customs duty and Valu-Added Tax(VAT).

This directive is expected to crash the galloping prices of the product which is being sold between N950 to N1200 per 1 kg

The Ministry of Finance disclosed this in a letter (dated November 28, 2023) to the Special Adviser to the President on Energy; the Comptroller-General of the Nigeria Customs Service (NCS); and the Chairman of the Federal Inland Revenue Service (FIRS).

According to the ministry, the exemption aligned with President Bola Tinubu’s commitment to enhance Nigeria’s investment climate, and promote clean cooking practices.

“In line with His Excellency, President Bola Tinubu’s commitment to improving the investment climate in Nigeria, increasing the supply of LPG to meet local demand, reducing market prices and promoting clean cooking practices, I hereby affirm Presidential directive dated July 29, 2022, with reference number PRES/88/MPR/99,” the letter reads.

“Accordingly, the importation of LPG utilising HS Codes 2711.12.00.00, 2711.13.00.00 and 2711.19.00.00 is exempt from Import Duty and Value-Added Tax. Consequently, the Importation of LPG shall incur a 0% duty rate and 0% VAT rate, effective immediately.”

The ministry instructed the NCS and FIRS to comply with the directive pending its official gazetting. \

Also, the ministry directed the NCS to comply with the presidential directive, dated July 29, 2022, and withdraw all debit notes issued to petroleum marketers who have imported LPG “using codes 2711.1.2.00.00 and 2711.13.00.00 from August 26, 2019, to the present date”.

Other items exempted from VAT and duty payment are LPG cylinders, LPG cascades, gas leak detectors, steel pipes, steel valves and fittings, LPG dispensers, gas generators, LPG trucks, among others.

Before now, 7.5 per cent VAT was slammed on the product which made its prices in the market to hit the roof.

Headlines

Maritime media charges federal government on disbursement of controversial CVFF

President Tinubu

The Eyewitness Reporter

Worried by the stalemated disbursement of the controversial Cabotage Vessel Finance Fund (CVFF) which has lingered for so long, the League of Maritime Editors (LOME) has urged President Ahmed Tinubu to expedite action on the release of the funds to trigger the development of indigenous shipping industry.

The group also called for urgent rehabilitation of collapsed critical port infrastructure at the nation’s seaports.

The President of LOME, Timothy Paul Okorocha, made these calls at the League’s 25th anniversary held in Lagos on Wednesday, with the theme ‘Harnessing Nigeria’s Potential in Marine & Blue Economy’,

While congratulating President Bola Tinubu for the further unbundling of the Ministry of Transportation and the establishment of the Ministry of Marine and Blue Economy, Okorocha appealed to the President to exercise the required political will to push further by ensuring that the routine talk about the rehabilitation of collapsed critical port infrastructure receives urgent executive attention.

“As development partners, the League looks forward to the effective participation of the respective agencies in the current administration’s renewed agenda template; and wants to see the Nigerian Ports Authority move away from the ritual of endless talk and lamentations into doing the needful, the reconstruction of broken down asset and infrastructure,” he said.

Also worried by the lingering delayed disbursement of the CVFF, the League further urged President Ahmed Tinubu to provide the Minister of Marine and Blue Economy, Adegboyega Oyetola, and his ministry, the needed impetus to bring to an end, the unending rat race of the disbursement of the CVFF, saying that the fund established since 2003 would jump-start a new lease of life for the capacity development of indigenous ship-owners.

He added that this would enable Nigeria to participate meaningfully in seaborne trade; especially with the proposed commencement of the implementation policy of the blue economy.

The LOME President noted the genuine struggle by the Nigerian Maritime Administration and Safety Agency (NIMASA) and its leadership, especially under the present administration to disburse the CVFF but observed that the efforts suffered political disruptions.

“As insiders, the League over the years has seen the genuine struggle by the Nigerian Maritime Administration and Safety Agency (NIMASA) and its leadership, especially under the present administration to disburse the CVFF in its commitment to grow local capacity building, but observe the otherwise disruptive tendencies within the field of political play.

“We appeal to Mr. President to use his good offices to prevail on the relevant authorities to respond to the needs of our industry as there can be no better time than now,” he said.

Speaking on the theme of the conference, Doctor Charles Okoroefe of Nigeria Maritime University also hailed the unbundling of the transportation ministry which he said was a misnomer.

He has decried the untapped potential of marine resources, especially in the area of tourism in Nigeria, regretting that marine tourism is lacking in Nigeria unlike in Gambia and the Caribbean where marine tourism is a major source of income where marine tourism rakes in billions of dollars.

“Egypt made about $14 billion in tourism from the Nile in 2022,” he added.

“People troop in into the Bahamas. Do we (Nigeria) have the potential? Yes. But the question is how prepared are we?” he queried.

He stressed that marine tourism is a solution in terms of job creation and that the time has come for Nigeria to progress from potential to actuality.

“So talking about job creation. All of these elements I mentioned are potential areas for job creation because it is a major issue in Nigeria today.

” A lot of young people are jobless. Meanwhile, we have an area that is green where a lot of jobs can be created.

“So I think we have to look at that potential area of driving our marine and Blue Economy,” Okoroefe stated.

He also called on the Ministry of Marine & Blue Economy to synergise with the Ministry of Agriculture to harness the potential of the sea.

“So, I believe the Ministry of Marine and Blue Economy has to synergise with the Ministry of Agriculture and also harness exotic seafood for export,” he explained, saying we cannot be depending on imports alone.

He urged the ministry to look at other fundamental seafood we have in excess that we can process through the rivers for export.

The marine expert regretted that Nigeria still imports palm oil from Malaysia, the same people who came to Nigeria to learn how to plant seedlings and today Nigeria is importing palm oil from Malaysia, “these are exportable items. So I believe the Ministry of Marine has to do a lot.

“With the Ministry of Agriculture for instance, with the Ministry of Power and the Ministry of Tourism, these are resources that we need to address in order for us to develop and come out of potential to thrive. On our ocean and marine resources, we’ve been talking endlessly.”

Headlines

Tantita refutes, describes allegation of oil theft by Navy as libelous, defamatory

Capt. Warredi Enisuoh

The Eyewitness Reporter

Following an allegation of involvement in the alleged oil theft incident against Tantita Security Services Limited by the Nigerian Navy, the security outfit has described the accusation as laughable and an attempt by the Navy to cover up the truth.

The security outfit, which has received widespread commendation for its efforts in combatting the menace of oil theft in the country, debunked accusations of any involvement of its operatives in the incident while lampooning the Navy for underestimating its operatives.

Reacting to the development, the Executive Director – Operations and Technical, Tantita Security Services Nigeria Limited, Capt. Warredi Enisuoh in a statement described the Navy’s claim as “defamatory and libelous”.

The statement said: “The activities going on inside the Nigerian Navy’s FalconEye should be investigated as the ship was only a few kilometers off the coast of Ondo State, well within view of the Nigerian Navy’s FalconEye, but they never reacted”.

“We are indeed saddened and disappointed that the Nigerian Navy could descend so low as to make such bizarre accusations against our organisation, knowing the same to be false,” he added.

“Perhaps they are not aware that video evidence of what transpired between the Tantita operatives and the Nigerian Navy at the scene exists and has been transmitted to the highest authorities.

“We will therefore not join issues with the Nigerian Navy as we are well aware that Nigerians know who is who.”

It would be recalled that the activities of Tantita and other security outfits have saved the country a whopping $43.2m from oil theft daily.

Recalled that on Thursday, December 7, 2023, the Nigerian Navy had disclosed that 17 people said to be engaged in the illegal siphoning of crude oil in Ondo State were nabbed aboard a 77-meter-long Motor Tanker (MT) VINNALARIS 1 Lagos.

Navy spokesperson, Commodore Adedotun Olukayode Ayo-Vaughan, disclosed in a statement, saying the suspects were nabbed at the Forward Operating Base (FOB) Igbokoda in the early hours of Thursday.

However, a day later, the Navy turned around to accuse Tantita Security Services Limited (TSSL) of complicity in the incident.