Guardian

MANUFACTURERS, under the aegis of the Manufacturers Association of Nigeria (MAN) Gas Users Group, have called on the Federal Government to address the issue of gas pricing and payment system to promote the fortunes of industries dependent on the alternative energy supply.

Precisely, the manufacturers advocated a better pricing arrangement considering the continued fall in the global price of gas, while urging the franchisers to adopt the ‘pay as you use’ parameter to aid the real sector’s growth.

Speaking at the yearly general meeting of the MAN Gas Users Group, Immediate Past Chairman of the group, Felix Okojie, noted that the move to address the pricing issue has become pertinent to aid industrialisation and save industries from collapsing.

He said: “The pricing schedule in 2013 is on a greater margin when compared to the previous years. This is as a result of the clause on the new gas schedule, which subjected the price of gas to a movement in exchange rate as published by the Central Bank of Nigeria.

“This situation remains worrisome to the Group, given the fact that our local sourcing has absolutely nothing to do with refining that normally attracts foreign exchange. Also, considering the major characteristics of the Nigerian business environment, which includes lack of competitiveness arising from prevalent high cost of production.”

He then urged the franchisers and partners in the gas supply chain to write off the debt arising from the differential of N2 in pricing of gas from N35 to N37 for which some of the firms are still being penalized even after a resolution was reached.

He explained: “The price of gas worldwide has continued to drop after the arrangement of gas pricing by the government. The current price of gas is a little below $3 per scm, which locally comes to about N21.26 per scm. We are not oblivious of the fact that the Federal Government has been making steady profit in gas sales since the coming into effect of the new gas pricing scheme. We hope the franchisers would write off the debt arising from the price differential in order to sustain a working relationship and promote industrialization in the country”.

On the issue of payment system, Okojie urged the franchisers to review the system in order to enable end users pay based on consumption.

He said: “we are not mindful of the principle of take or pay as stipulated in the GSPA. However, in view of the prevailing circumstances, we are constraint to request that end users are allowed to pay based on consumption as this will enhance the competitiveness of Nigerian manufacturers in the global business environment. Since many industrial companies are now hooked on gas, the standards should be reviewed.”

Representative of the Nigerian Gas Company, (NGC), Mohammed Aliyu explained that the company would address the issues raised, noting that the pay as you consume system may not work as manufacturers are only to demand for only what they can consume.

According to him, the supplier has invested in the value chain and would only make available product requested, while the franchiser’s growth is dependent on subscribed product and users consuming the product.

Newly elected chairman of the group, Dr. Michael Adebayo, however pledged support of the newly elected team in driving the goal of the group.