Nigeria set to migrate from FOB to CIF for its crude trading

The Nigerian Maritime Administration and Safety Agency has said that it achieved a level of success on the discussion around the migration from Free On Board to Cost, Insurance and Freight trade terms for the nation’s crude oil.

The agency added that this migration would enable indigenous shipowners and the economy benefit from the nation’s crude oil trade. The Director-General, NIMASA, Dr Dakuku Peterside, disclosed this in Lagos to a maritime writers’ group, SCAN, who paid a courtesy visit to his office.

Peterside, who was represented by the Executive Director, Finance and Administration, NIMASA, Dr Bashir Jamoh, said discussions were ongoing with the Nigerian National Petroleum Corporation regarding the migration.

He said, “We are talking with Nigerian National Petroleum Corporation and believe that with time, we will have a breakthrough in ensuring that some Nigerian shipowners get the right to lift our crude oil.

“Interestingly, from our conversations, we have evidence that Nigerians are already lifting oil but we cannot unveil those involved. The NNPC has indicated that some of them are already lifting, and feel it is safe for them to lift without any problem.”

CIF and COF are international shipping agreements used in the transportation of goods between a buyer and a seller

CIF is an expense paid by a seller to cover the costs, insurance, and freight against the possibility of loss or damage to a buyer’s order while it is in transit to an export port named in the sales contract. Until the loading of the goods onto a transport ship is complete, the seller bears the costs of any loss or damage to the product. Furthermore, if the product requires additional Customs or export paperwork or requires inspections or rerouting, the seller must cover these expenses. Once the freight loads, the buyer becomes responsible for all other costs.

 

Source: The Punch

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