Also yesterday, Gaslink Nigeria Limited disclosed to the Senator Osita Izunaso led Committee at the National Assembly complex in Abuja that it has resolved to start selling gas at N24.21 per metric standard cubic feet, following disagreement between the company and Manufacturers Association of Nigeria (MAN) on the old price regime of N67.

The new price regime, effecttive from the 1st of July, 2008 was arrived at between NGC and MAN based on the directives from the Committee on Gas last week that the warring parties must look for a working solution to the problem caused by gas price hike.

A communiquéé signed by the Managing Directors of NGC, Engineer Voka Mukoro and Gaslink Nigeria Limited, Bolaji Ogunsanya reads, “There will be a 15 percent increase from N21.05/scm to N24.21/scm price of gas. This new price will take effect from July 1, 2008.

On the debt owed NGC by PHCN, Chairman of the Committee Senator Izunaso while giving the directives to Minister of State of Energy (Power) Mrs. Fatimah Ibrahim who appeared before the Committee said PHCN cannot continue to be indebted to NGC given the huge money the company generates from its consumers.

He said: “We want to find out why power holding owns N16 billion that belongs to NGC that is supplying them gas. So they cannot give Nigerians light and they cannot even pay for a highly subsidized product. What are they holding? They are holding NGC money."

“We have resolved to give PHCN two weeks to reconcile it figures with NGC and return with a workable timetable for payment of the deb.”

The Minister in her response however disagreed with the total figure being owed NGC by PHCN. According to her, power holding is only indebted to NGC to the tune of N6.5 billion.

The difference in the figure according to her emanated from disagreement between PHCN and NGC on the actual price for gas metric standard cubic feet.
While NGC said it was selling gas at various times with varying prices of N70, and N50.2/scm, PHCN agreed to pay only N30/scm.

She further disclosed that about N4 billion dating back to as far as 1979 owed NGC, which now included in the debt was supposed to have been written off as bad debt by NGC in 2001 following a resolution that was taking at inter ministerial meeting.

On why the company allowed the debt to accumulate to this extent, despite the fact that it rakes in N7 billion monthly as revenue, the Minister said it was due to disruption in power generation and distribution caused by militant activities in the Niger Delta and theft of parts of transformers.

She added that if power generation is improved, PHCN would be able to offset the debt.

“We have not been able to pay the debt because of some challenges. But if we successfully complete the rehabilitation and expansion of generation and distribution, our revenue will improve and will pay because the will to pay is there but the ability to pay is the problem,” she concluded.

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