Breaking News
Translate

Companies to pay N40 per cubic feet of gas

The Manufacturers” Association of Nigeria (MAN) has agreed to pay N40 per cubic feet of gas to break the lingering crisis between manufacturers and Gaslink Nigeria Ltd. Gaslink Nigeria Ltd is a subsidiary of Oando Plc.

The of President of MAN, Alhaji Basher Borodo, told newsmen on Wednesday in Lagos that the resolution was reached after several meetings.

He said the meetings were brokered by the Minister of Petroleum, Mr Odein Ajumogobia, and the Minister of State for Commerce and Industry, Mr Humphrey Abba.

With the agreement, the price of a cubic feet of gas has been increased from N24.40 to N40. The manufacturing sector had been engulfed in gas supply crisis for four months this year following plans by Oando Plc to increase the price of gas.

The stand of Oando Plc is that the price of gas should be a benchmark, following the increase in the price of Low Pour Fuel Oil (LPFO).
Borodo said that the agreement was reached to enable government to take a critical look into the sector and provide a lasting solution to the gas price issue.

He commended the intervention of the two ministries in the issue.
Borodo said that their efforts were aimed at ensuring that companies that shut down because of the cut in gas supplies were able to return to business.

“ We agreed to pay because our members are losing huge sums of money being out of business for over two weeks now. We have been paying wages and running other auxiliary services without carrying out any production,” the MAN president said.

According to him, Oando supplies gas to manufacturers, particularly in Iganmu and Ikeja in Lagos. “When you destabilise operations in these areas, it is as good as an causing economic crisis. This is because it will cause the prices of several products to increase, result in the closure of factories and cut down the work force,’’ he said.

On the increase, Borodo said it was not justifiable since the Nigeria Gas Company, a subsidiary of the NNPC, which supplies gas to the gas companies had not increased gas price.

“The Oando argument that the increase was based on infrastructure such as pipelines laid over four years ago is unfounded,” he said.
Borodo, however, said that a lasting solution was to encourage more investors to go into the gas supply sector, saying that it would break the monopoly now enjoyed by Oando. “Though Oando is not the only company in gas supply, but its the company that got connected to major companies. The other two or three gas companies have just little share of the market,”he said.

Borodo urged the Federal and State Governments to deal with the issue decisively, saying that it could get out of hand after the deregulation of the downstream sector. The Director-General, Nigerian Textiles Manufacturers Association (NTMA), Mr Jolayemi Olarewaju, expressed concern that Oando’s attitude was capable of discouraging industrialisation and investments.

He said that the various companies had invested massively in retooling their plants because of the Federal Government”s clarion call for them to use gas instead of electricity. But Gaslink Nigeria Ltd insisted that its advert published in several newspapers on the issue explained that the price increase was a benchmark following the increase in the price of LPFO.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.