Home / NEWS LENS / WAR RISK INSURANCE SCAM: NNPC Pays Foreign Oil Tankers N180m Daily

WAR RISK INSURANCE SCAM: NNPC Pays Foreign Oil Tankers N180m Daily

  • WAR RISK INSURANCE SCAMNigeria loses N1.5 trn on Mid-stream discharge

There seems to be a stream of fraud running in the Nigerian National Petroleum Corporation(NNPC)  with  the  latest discovery that the corporation fraudulently pays a whopping   $900,000 (N180million) daily as  war risk insurance  premium charges to all Nigeria- destined foreign oil tankers  which berth illegally or engages in mid-stream discharge at Cotonou waters.

Findings by MMS Plus  revealed that NNPC has been shouldering all the extra charges on insurance of foreign vessels carrying fuel and diesel into the country. The insurance premium charges range from $25,000 to $30,000(N6million) each day, multiply by an average of 30 tankers laden with fuel on daily basis.

Confirming this, the President of Nigerian Content Consultative Forum,Mr. Mina Oforiokuma, who called for the audit of NNPC account said that the corporation has wasted $5illion(N1.5trn) in 10 years on payment made on demurrage and extra war risk charges for foreign vessels. The period in question here are between 2005 and 2015.

This oddity has remained because Nigerian maritime domain has been listed as one of the war risk zones, among Togo and Benin Republic in the Gulf of Guinea by the Joint War Committee(JWC) of Llyod  and International Underwriting Association(IUA) both of London.

While the rules guiding the operations of JWC states that the application of the maritime risk listed areas is negotiable for individual’s specific contract, NNPC has been paying a flat rate of between $25,000 and $30,000 as insurance premium charges to foreign owned oil tankers on account of interest for private owned businesses that lack government sponsorship.

What seems a surprise however is that while this payment has been running for ten years now, Nigeria was only listed as war risk zone by JWC in 2012, raising some suspicion of connivance with the JWC to reap the nation off through the NNPC.

JWC comprises underwriting representatives from both the Llyods and IUA company markets, representing the interests of who write hull war business in the London markets. It meets quarterly.

Worried about the hybrid illegal business of mid-stream discharge of Nigeria-bound cargoes in Cotonou waters, the Nigeria Customs Service(NCS) a fortnight ago re-directed  strict enforcement of all relevant provisions of the extant laws of the Service on ships and vessels that berth illegally outside the customs ports.

According to the circular from customs headquarters, Abuja, “ intelligence reports reaching headquarters indicate some form of compromise by officers where deliberate acts of impunity are perpetuated through illegal berthing of ships/vessels and mid-stream discharge of cargo other than officially designated customs ports despite existing circulars”.

In the words of Mina,” in the last ten years NNPC has lost at least $5billion on demurrage and extra war risk insurance premium to foreign tankers. As I speak now there are over 30 premium motor spirit( PMS) foreign tankers sitting outside Lagos today.  These tankers are about 30,000 to 40,000 tonnes and they come in under the war risk insurance premium that NNPC is paying everyday. Yet most of these tankers spend forty to sixty days before discharging the cargo.”

Mina, who is also the Downstream Coordinator of the Ship Owners Association of Nigeria(SOAN)equally called for investigation into the payments by the corporation, adding: “ Hold me to it and let them go and do their audit. The same thing happens to the kerosene. We also import the commodity via these foreign tankers which stay on our waters accumulating demurrage and extra war risk insurance premiums.”

He continued:” The issue is that the NNPC does not seem to apply a business model. If a business man was to import these items, he would ensure that these tankers don’t spend more than three days here to avoid paying demurrage and it will also reduce the extra charges for war insurance risk as the tankers spend minimal time but NNPC remain unperturbed because it’s government money, hence they leave the tankers floating for 40,60 and even 80 days sometimes. The consequence is increased bills and expenses for the nation as a result of their ignorance”.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

× Get News Alert