Gas Producers Seek Full Payment From Power Sector
The Nigerian Gas Association and other stakeholders have said the liquidity issues that hamper returns from the power sector should be speedily resolved to address legacy debts and facilitate full recovery of gas revenues from the Nigerian electricity supply industry.
The stakeholders said this at a recent event tagged ‘Industry Multilogues’, organised by the NGA, according to a communique made available to our correspondent.
“We recognise and continue to advocate for a deepening of our domestic gas markets, as our true wealth as a nation lies not in the abundance of the resource, but rather in how extensively we are able to apply it towards various value-adding processes across different residential, commercial, industrial, petrochemical, power, agricultural, transportation, and other such sectors,” the President, NGA, Mrs Audrey Joe-Ezigbo, said.
The stakeholders called for close collaboration across the entire industry value chain to urgently reach consensus on a pricing framework the market could bear but which should be rewarding enough to attract growth investments, secure project funding and sustain supplies.
They said any pricing model to be considered must take into full cognisance the peculiarities of the domestic operating environment.
According to them, gas policies in the upstream industry should guarantee the viability of gas projects to balance the government’s revenue targets and commercial interest of investors.
“The government should consider the use of direct subsidies to stimulate industrial growth rather than introduce pricing systems that distort market operations. Policies that affect investments should be clear enough to make investors determine recovery timelines,” the stakeholders said.
The NGA said it would continue to drive win-win policy advocacy for all stakeholders, while attracting international funding for local gas projects.
The stakeholders said, “There is a need for extensive stakeholder collaboration and interest alignment to progress the passage of the new PIB and secure clear, stable and attractive climate for new investments required to realise broad economic aspirations for the country.
“The PIB should provide competitive fiscal terms, weed out unnecessary operating cost components, resolve deepwater PSC disputes, and smoothen out the transition to new lease administration.”
They said the government should urgently fix the nation’s gas industry as the fastest way to boost manufacturing capacity and confront emerging competition in the African Continental Free Trade Area era.
“The government should improve the domestic operating environment with efficient factors of production to make Nigerian goods competitive in the coming ACFTA context,” they added.