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Clearing Agents Kick Against Increment in Shipping Fee by Grimaldi Company

PIN is usually used for imports that do not have a bill of lading

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Following the reported increment in the charge of Personal Identification Number (PIN), clearing agents have condemned Grimaldi Shipping Company’s plans to charge N25,000 before importers would obtain the PIN.

Investors King  learnt that the PIN is usually used for imports that do not have a bill of lading.

In the case an importer does not have a bill of lading, a PIN would be sent from the port of origin to the importer and this would be used to clear the cargo at the port of destination in place of the original bill of lading.

Grimaldi Shipping Company, a subsidiary of Ports & Terminal Multipurpose Limited, had in a circular dated January 24, 2023, announced that the PIN release charge with effect from February 1 would be N25,000 as against about N10,000 it was being charged.

The company had said it took the decision because of rising costs of items around its business environments, saying that its customer ought to have understood the situation at hand.

Because of the hike in prices of goods, the company said it reviewed the shipping PIN charges upward.

According to Grimaldi, customers would start paying for the new charge from February 1, 2023 and that the PIN release fee would be N25,000 per bill of lading.

It said customers may continue to secure release submission of the original bill of lading, which is at no extra cost.

Aggrieved by the increment they described as outrageous, the clearing agents argued that it was not compulsory for an importer to pay for what they might not need as the charge would affect importers.

While noting that other shipping companies do not charge for PIN release as high as Grimaldi does, the agents said the new policy would not stand.

Speaking, the Deputy President of the National Association of Government Approved Freight Forwarders, Ugochukwu Nnadi, who is in charge of shipping and terminal services, said the company raised the PIN release fee from about N10,000 to N25,000.

Nnadi said other shipping companies do not charge as high as what Grimaldi issued, and urged it to reverse it.

He said the association would take further steps to press for the reversal of the PIN release fee, lamenting that the association had written the Nigerian Shippers Council and the Council for the Regulation of Freight Forwarding in Nigeria over the development, but there was no solution as at the time of this report.

He said other shipping companies charge between N7,000- N12,000 but noted that Grimladi charges as high as N25,000, which he described as unacceptable.

According to Nnadi, shipping companies do not have the right to charge for PIN release before releasing cargo.

In his remarks, a freight forwarder, Mr George Okafor, said they would keep meeting the company for it to rescind the new upward review adding that the fee was N10,000 before it was jacked up to N25,000.

A staff with Mediterranean Shipping Company, who spoke on the condition of anonymity, noted that it charge between N7,000 and N10,000 as its documentation cost.

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Dangote’s $20 Billion Refinery to Begin Petrol Sales Next Month

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Aliko Dangote announced on Monday that his long-awaited $20 billion refinery complex will commence petrol sales starting next month.

The announcement came during a press briefing held at the refinery site in Lagos, where Aliko Dangote, Africa’s richest man, detailed the project’s progress and future plans.

“We are proud to announce that the Dangote Refinery will begin selling petrol from August,” Dangote stated confidently.

“This milestone marks the culmination of years of meticulous planning, construction, and overcoming numerous challenges.”

Dangote’s refinery, touted as the largest single-train refinery in the world, is designed to process 650,000 barrels of crude oil per day once fully operational.

The facility aims to not only meet Nigeria’s domestic demand for refined petroleum products but also contribute significantly to export markets across West Africa.

“We have entered the steady-state production phase earlier this year, and now we are ready to begin commercial sales,” Dangote explained. “Initially, we will focus on petrol production, with plans to expand our product range as we ramp up to full capacity.”

The refinery’s launch is expected to alleviate Nigeria’s longstanding dependence on imported refined products, thereby boosting the country’s energy security and reducing foreign exchange outflows associated with fuel imports.

Beyond petrol sales, Dangote revealed ambitious plans to list both the refinery and its associated fertilizer plant on the Nigerian Exchange Group (NGX) by the first quarter of 2025.

This move aims to attract broader investor participation and unlock additional value for shareholders.

“We are committed to transparency and accountability in our operations,” Dangote emphasized. “Listing these subsidiaries on the NGX will not only strengthen our corporate governance framework but also enhance the refinery’s financial sustainability.”

Challenges and Future Prospects

Despite celebrating the imminent commencement of petrol sales, Dangote acknowledged challenges encountered during the project’s execution, including delays in securing land for a petrochemical facility in Ogun State, which incurred substantial costs.

“We faced bureaucratic hurdles that resulted in significant delays and financial losses,” Dangote lamented. “Nevertheless, we remain steadfast in our commitment to advancing Nigeria’s industrial capabilities and contributing to economic growth.”

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Dangote Refinery to Import First Brazilian Crude Oil Shipment Next Month

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The Dangote Refinery is set to receive its first shipment of Brazilian crude oil next month.

This is a pivotal moment in the country’s efforts to reduce its reliance on imported fuel and bolster its domestic refining capacity.

The purchase involves a one-million-barrel cargo of Brazil’s Tupi crude, scheduled for delivery in the latter half of August.

This is the first time Nigeria will be importing Brazilian crude, underscoring the Dangote Refinery’s commitment to diversifying its crude oil sources and ensuring a steady supply for its operations.

The Dangote Refinery, Africa’s largest, has been instrumental in Nigeria’s strategy to address the long-standing issue of fuel import dependency.

Despite being the continent’s leading oil producer, Nigeria has historically relied heavily on foreign fuel imports due to insufficient domestic refining capabilities.

The operationalization of the Dangote Refinery is expected to change this dynamic, enhancing the nation’s energy security and potentially lowering fuel prices for consumers.

Aliko Dangote, the CEO of Dangote Refinery, said “Importing crude and refining it locally will significantly enhance Nigeria’s energy security. Our ability to source crude oil from various global suppliers, including Brazil, is crucial for the refinery’s success and the broader energy strategy of the country.”

The Brazilian crude, sold by Petrobras, is among the most cost-effective and suitable oil grades available on the global market, making it an ideal choice for the refinery.

This strategic import is part of Nigeria’s broader efforts to secure a stable supply of crude for its refineries, ensuring that the country’s energy infrastructure is resilient and capable of meeting its needs without over-relying on any single source.

In a related development, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently reached an agreement with oil producers to supply crude oil to domestic refineries at market prices. This resolution came after a protracted supply dispute, which had strained relations with international oil companies.

The agreement ensures that Nigeria’s refineries, including the Dangote Refinery, have access to the necessary crude supplies at competitive prices.

This move is expected to end the challenges faced by local refineries, which have struggled to secure crude supplies due to excessive premiums demanded by international oil companies or claims of unavailability of crude.

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NNPC’s Stake in Dangote Refinery Drops to 7.2% Due to Unpaid Balance

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Dangote Refinery

Aliko Dangote, the Chief Executive Officer of Dangote Refinery, announced that the Nigerian National Petroleum Corporation (NNPC) Limited’s stake in the refinery has dropped from the previously held 20% to a mere 7.2%.

This reduction is attributed to NNPC’s failure to pay the balance of their shareholding dues, which was expected last month in June.

Dangote disclosed this during a media parley held at the refinery on Sunday, shedding light on the current ownership structure and the financial commitments made by the national oil company.

“The agreement was actually for 20%, but NNPC did not pay the balance of the money up till last year. We then gave them another extension up to June 2024, and they decided to remain at the 7.2% stake for which they had already paid,” Dangote stated.

This revelation has come as a surprise to many Nigerians who had been under the impression that the NNPC maintained a 20% stake in the refinery.

The reduction in ownership highlights the financial challenges faced by the state-owned oil company.

In 2021, the Group Managing Director of NNPC, Mele Kyari, had championed the decision to acquire a stake in the Dangote Refinery, citing the profit potential and the strategic importance of having a say in the refinery’s operations.

The investment was seen as critical to ensuring energy security for Nigeria and supporting the country’s fiscal stability.

Earlier this year, NNPC’s audited financial statements indicated that the corporation had acquired a 20% stake in Dangote Refinery for $2.76 billion.

This included a $1.036 billion funding from Lekki Refinery Funding Limited, of which $1 billion was paid to Dangote Refinery and $36 million covered transaction costs.

During the media parley, Dangote addressed various issues, including the challenges of supplying crude to the refinery.

He confirmed that the refinery has been sourcing crude from the United States and Brazil, while also noting the government’s intervention to resolve the supply issues.

The Dangote Refinery, located in the Lekki Free Zone, Lagos, is a massive project with a capacity of 650,000 barrels per day (BPD). Once fully operational, it aims to become Africa’s largest oil refinery and the world’s largest single-train facility.

The refinery is expected to generate approximately 9,500 direct jobs and an additional 25,000 indirect jobs, significantly boosting the local economy.

In addition to refining, the facility includes a fertiliser plant that will use by-products from the refinery as raw materials, further enhancing its economic and environmental impact.

The refinery is projected to produce around 50 million litres of petrol and 15 million litres of diesel daily, along with significant quantities of jet fuel and other petroleum products.

The reduction of NNPC’s stake underscores the financial complexities surrounding large-scale investments in Nigeria’s oil and gas sector.

As the Dangote Refinery nears full operation, the focus will be on how effectively it can address the country’s energy needs and contribute to economic growth, despite the challenges faced by its stakeholders.

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