Manufacturers seek re-categorisation on gas usage as price rises
The Manufacturers Association of Nigeria (MAN) has sought government’s intervention in re-categorising gas users under the new gas policy, in a bid to manage the rising cost of production being borne by local producers.
According to the manufacturers, while the articulation of the National Gas Policy, which has already been gazetted, is highly commendable, certain fundamental issues of concerns to Nigerian manufacturers ought to be urgently addressed.MAN also raised concerns about the recurring issue of frequent increases in the price of gas by franchiser.
According to MAN, a recent circular from the Nigerian Gas Marketing Company Limited (NGMCL) stated that the 2018 gas price for the commercial sector has been increased from $7.45/mscf to 7.62/mscf with effect from January 1, 2018.
“This we feel, is inappropriate when viewed from the current effort by government to stabilise the gas industry and address all the issues affecting relationship between the users and the producers of gas in Nigeria. We would appreciate government’s intervention and kind consideration of the issues raised above in order to accelerate the performance of the manufacturing sector as the engine of growth”, MAN added.
MAN in a letter to the Minister of State, Industry, Trade and Investment, Hajia Aisha Abubakar and signed by the association’s Director-General, Segun Ajayi-Kadir stated that the existing categorisation of manufacturing sector as ‘Other Commercial sector’, has left bigger room for abuse by the franchisers which is one of the issues that MAN believes the new National Gas Policy should address.
Citing the challenges encountered by the local producers under the new gas pricing regime, Ajayi-Kadir said: “There have been supply gaps and its accompanied constraints on local users as a result of the preference for export at the detriment of domestic demand.
“The recent incessant increases along with subtle harassments of our members by the franchisers constitute an unhealthy business environment and is destabilising our members’ business operations”.
He however prayed the Minister to re-categorise manufacturers from commercial sector to strategic industrial sector (similar to the textile sub-sector) since they use gas to power machinery and equipment.
“Even though we are unmindful of measures being put in place by government to address some of the lingering problems of gas supply and its associated issues, we are constrained to put forward the following prayers: This re-categorisation should cover all the industrial sectors with a view to reducing the high cost of production while further making Nigerian industries more competitive globally.
“Therefore, a wholesale implementation of the National Gas Policy with its attendant benefits and status is requested. The status should be accorded to all industrial strata so that those who are heavy users of gas; such as steel, cement and glass industries as well as others with lesser consumption of gas will be on board”, he added.