By G. Watson Richards
A confidential 20-year petroleum storage agreement between SRIMEX Enterprise Inc. and the Liberia Petroleum Refinery Company (LPRC) has been leaked, revealing a payment of 0.03 cents per gallon in royalty fees to LPRC for the storage and importation of petroleum products.
Signed on June 21, 2012, the agreement grants SRIMEX exclusive rights to construct and operate storage and loading facility on leased land within the Freeport of Monrovia, Bushrod Island.
The facility, covering approximately 2.3 acres, was to be built and maintained by SRIMEX at its own expense, adhering to international standards.
According to the document, SRIMEX will pay LPRC a royalty fee of just 0.03 cents per gallon of petroleum products imported or stored at the facility for the duration of the agreement.
In addition to this minimal royalty, SRIMEX is responsible for paying all applicable import levies, sales taxes, and turnover taxes directly to the Liberian government.
The agreement grants LPRC oversight and authority to supervise the construction and operation of the facility to ensure compliance with international standards.
It also restricts SRIMEX from storing products from other importers without prior approval from LPRC, with additional fees applied for any violations.
The contract is set to last 20 years from the completion of the storage facility, with an option to renew at LPRC’s sole discretion. LPRC also reserves the right to terminate the agreement on short notice due to security concerns or contract breaches by SRIMEX.
Critics argue that the royalty fee arrangement is disproportionately low, potentially limiting Liberia’s economic gains from its petroleum importation sector.
This fee starkly contrasts with typical royalty structures in similar regional agreements.
The leaked agreement raises serious questions about transparency, revenue generation, and oversight in Liberia’s petroleum industry, an essential sector for the nation’s economy and energy security.
Lawmaker and SRIMEX CEO Musa Bility Criticizes New Storage Fee Cuts
Reacting to a recent government communication from LPRC, Hon. Musa Hassan Bility, Nimba County District #7 Representative and CEO of SRIMEX Oil and Gas Inc., strongly condemned the Government’s decision to reduce storage fees payable to Liberian terminal operators from thirty-five cents ($0.35) to two cents ($0.02) per gallon.
