Manufacturers want gas price fixed at $3

As the price of per standard square metre (scm) of gas remains at almost $8, manufacturers say they would want a review of the National Gas Policy that will cut down price to $3 or less.

“We want the price to go below $3 or at most $3,” Micheal Ola Adebayo, chairman of the Manufacturers Association of Nigeria (MAN) Gas Users Group, told Real Sector Watch.

“The international price  of gas is less than $3, so why should we pay $7.48  for a standard square metre? I don’t know how the local manufacturing industry will survive this,” Adebayo lamented.

In August 2016, MAN Gas Users Group claimed that Shell Petroleum sold gas to the Nigerian Gas Company (NGC) at about nine cents, while the NGC would sell to other franchisers at $2.

They wondered why gas franchisers would sell to manufacturers at $7.38 per scm.  Manufacturers say high gas price has ramped up their energy costs from 30 to 45 percent, while threatening to shut down factories.

Medium-scale manufacturers and multinationals use gas, instead of the more expensive low-pour fuel oil (LPFO), to power their operations.

Poor power remains a major challenge facing manufacturers.  Electricity supply from power distribution companies (DisCos) worsened across the country in 2016 as manufacturers spent N129.95 billion on alternative energy sources within the year as against N58.82 billion recorded in 2015.

The 2016 figure represents 121 percent jump from that of 2015, data exclusively obtained from the Manufacturers Association of Nigeria (MAN) show.

 ODINAKA ANUDU