The cost of berthing a petrol-laden ship in Nigeria is substantially higher compared to its West African counterparts, significantly impacting the country’s petrol prices. Bringing a 30,000-tonne vessel of Premium Motor Spirit (PMS) to berth in Nigeria costs nearly six times more than in Ghana, Benin Republic, Senegal, and Tanzania. This discrepancy stems from the need for ship-to-ship transfers due to deep draft requirements, as most jetties in Nigeria lack the necessary depth. The resulting lightering expenses significantly contribute to the high landing cost of petrol in Nigeria.
Key Points:
- Berthing a 30,000-tonne vessel of petrol in Nigeria costs approximately $299,069, while the average cost in neighboring countries like Ghana, Benin Republic, Senegal, and Tanzania is around $52,472.
- Deep draft requirements of vessels carrying refined products from Europe necessitate ship-to-ship transfers in Nigeria, as most jetties lack the necessary depth.
- The lightering process, dependent on the exchange rate, adds to the landing cost of petrol in Nigeria and is a consequence of underdeveloped port infrastructure.
- High berthing costs contribute to the overall landing cost of petrol in Nigeria, which is currently around N720, leading to challenges in the petroleum products sector.
- The Nigerian government is urged to focus on cost-efficiency and reduce landing costs to support the sustainability of the industry.
- The challenging economic environment, marked by high costs of crude oil, exchange rate fluctuations, and high-interest rates, is affecting depot owners and filling station operators, with many struggling to secure funds for operations.
Analysis: The substantial disparity in ship berthing costs between Nigeria and its West African counterparts underscores a critical issue affecting the country’s petrol prices. High costs associated with berthing contribute significantly to the overall landing cost of petrol, impacting the petroleum products sector. The need for ship-to-ship transfers, driven by inadequate jetty depth, further exacerbates these expenses. This situation calls for urgent attention from the Nigerian government to address inefficiencies and reduce operational costs in the petroleum industry. Efforts to stabilize exchange rates, lower interest rates, and provide support to depot owners and filling station operators are crucial in ensuring the sustainability of the sector. It is imperative that concrete measures are taken to enhance port infrastructure and operational efficiency, ultimately benefiting both the industry and consumers.
