Charles Nwaoguji and Merit Ibe
The Manufacturers Association of Nigeria (MAN) is now producing under excruciating environment following inadequate power supply which has increased demand for gas as alternative source of power generation.
The National Chairman of non-Metallic Mining Group of MAN, Mr. Afam Mallinson Ukatu, who expressed this concern over the increase in the price of gas, regretted that this is coming when the global economy is facing challenge.
Ukatu said: “The pandemic is not peculiar to Nigeria alone, it is ravaging the global economy. But I expected the government to give palliative to manufacturers to cushion the resultant effect of the pandemic instead of the commodity price going up.
“We have been complaining that we are being charged in Dollar for consuming gas locally and nothing has been done to reverse the ugly trend. I have been complaining about this over the years at the parent organisation (MAN) for a very long time that the trend should be reversed and also for the government to look into it.
“It is very painful that gas, which is gotten from our soil, is being sold to us in US Dollars. We are being charged according to the exchange rates. Now that the exchange rate has gone up following the technical devaluation of the Naira, and scarcity of Forex, the increase has come again when we are asking for what palliative the government would give us to ameliorate our situation, enable us pay salaries, gas bills and offset some bills that accumulated during the lockdown. We were also looking up to the government to give us some relief for one year or more, but what we are getting is increased gas price. This is not done in any part of the world. It is only in Nigeria that this is happening and it is quite unfortunate.’
He pointed out that irrespective of the fact that the cost of production is going high, the cost of moving raw materials from mining site to the factory is extremely expensive due to inaccessible roads occasioned by the rainy season.
Ukatu said that the current price of gas has pushed the cost of production up by over 30 per cent, stressing that they are losing huge amount on daily basis.
“In 2019, we were advised not to pay the actual gas bills that the government has given some incentives to some sectors like the textile sector. So we asked a question, why was textile the only considered sector while there are other sectors that are purely producing made in Nigeria goods which are neglected. However, as we speak, the textile sector has not even gotten that discount. I am amazed that the government who is supposed to be encouraging us in order to employ more people is behaving this way. This is, however, a deterrent to intending investors,” he stressed.
According to Dr. Micheal Adebayo, Chairman, Oil and Gas Sectoral Group of MAN, the sector is working in collaboration with the Federal Government to revert the payment of gas consumed locally from Dollar to Naira.
He disclosed that government was trying to look inward to make sure that the domestic supply of the product is available and affordable.
Though he noted that with the devaluation of the Naira and the skyrocketing of the dollars, it might not be easy, he was, however , optimistic that the committee set up would come up with a concrete result.
“We hope the president will do something concrete to bring down the price of gas to what is applicable globally.”
The price of natural gas at the international market at $1.80 remains cheaper than $7.99 per standard cubic meter charged locally.
Decrying the fact that government’s promise for palliative was yet to be seen and the rising cost of productions was pushing industrialist to the wall, he expressed fears that mass retrenchment was looming in the real sector.
Admitting that the economy was in a severe strain due to the pandemic, he lamented that manufacturers were groaning, which has led to exit of industries in the country to neighbouring countries.
“The high cost of power has forced scores of manufacturing plants across the country to close shop, leading to mass retrenchment.
Due to the power challenge, most industries have relocated to neighbouring countries. The few firms are finding it difficult to remain in business.
Adebayo noted that the government has set up a committee to hamonise the Petroleum Industry Bill (PIB) as gas pricing for local consumption has been included in the PIB.
He pointed out that the delay experienced is to amend it once and for all, emphasizing that the bill is at the stage of becoming a legal document which would likely be passed into law and possibly implemented before the end of 2020.