Manufacturers, franchisers argue over gas billing disparity

Worried by the irregularity in the charges of its franchisers for gas consumption in the industrial clusters, the Manufacturers Association of Nigeria (MAN), has expressed concerns over the use of new flexible foreign exchange rate for services rendered before the period.

According to MAN, the use of the new policy of parallel/flexible exchange rate unveiled by the Central Bank of Nigeria (CBN) last month for services rendered in the period pre-dating the apex bank’s policy is worrisome and only adds to the burden of the real sector.

Specifically, some of the franchisers include, Shell Nigeria Gas Limited, Falcon Corporation Limited and Gaslink Nigeria Limited.

Director-General of MAN, Remi Ogunmefun, said the ongoing crisis in respect of the price of gas and the billing calculation system of the franchisers, remains a concern for MAN member-companies, who were given demand notice for services rendered at an exchange rate of N281/$1 against the N199/$1 at the time of agreement.

He explained that some other franchisers had issued their bills based on the appropriate use of CBN exchange rate in arriving at the bill issues to some of its members, noting that in the same month when exchange rate was N283/$1, MAN members were billed on the ruling rate for the gas supplied using the appropriate rate of N199/$1.

In a letter to the franchisers, Ogunmefun said: “It is worrisome that demand notice for the month of June 2016 was charged with the exchange rate at the time of billing which was the parallel/flexible rate of N281.75 and N283.75/$1. It is our considered opinion that this bill needs to be e-examined with a view to using the appropriate formula in arriving at the final figure.

“MAN being an umbrella body for the manufacturers, some of whom are customers of your organisation would like to appeal that your organisation should consider the request of our members by using the exchange rate at the time of consumption. This is in line with customer-supplier contractual obligations and in line with natural justice and fair play”.

Indeed, CBN’s latest survey on the Purchasing Managers Index (PMI), again recorded declining levels of production, new orders, employment and raw material inventories, in the build up to the release of the second quarter Gross Domestic Product (GDP).

Specifically, the manufacturing index, which rose marginally to 44.1 index points in July 2016, compared to 41.9 in June, is still below the basic level.

At 43 index points, the production level index for the manufacturing sector declined for the seventh consecutive month, although at a slower rate than in June 2016. Again, out of the 16 manufacturing sub‐sectors, 12 recorded declines in production level during the review month, led by primary metal; plastics and rubber products; printing and related support activities; furniture and related products; appliances and components; and non-metallic mineral products, among others.