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Stakeholders seek policies as FG denies gas equalisation

By Kingsley Jeremiah, Abuja
24 November 2021   |   3:51 am
An earlier plan by the defunct Petroleum Equalisation Fund (PEF) to equalise the consumption of gas, especially Liquefied Petroleum Gas may no longer fly as the government said subsidising the transport ...

[FILE PHOTO] cooking gas

An earlier plan by the defunct Petroleum Equalisation Fund (PEF) to equalise the consumption of gas, especially Liquefied Petroleum Gas may no longer fly as the government said subsidising the transport cost of the commodity in the face of a liberal market may not work.

This is just as stakeholders are demanding for deliberate policies that would enable the country to harness gas resources to benefit from the global energy transition agenda.

While the defunct PEF had disclosed earlier this year that a scheme to pay for the transportation of gas as part of an effort to encourage the use of cooking gas in homes across the country was being considered, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said such a move may be unnecessary.

Executive Director, Distribution System, Storage and Retail Infrastructure at NMDPRA, Ogbugo Ukoha said although Nigeria has gas in large quantities, bottlenecks undermine realization of full potential.

Speaking in Abuja recently on equalisation for gas, Uhoha said: “the Act provides for liberalisation. We can’t set prices, we can’t equalise it.”

According to him, the market would stabilise at some point and deal with prevailing issues. The Independent Petroleum Producers Group (IPPG), headed by Abdulrazaq Isa, has also noted the right policies were necessary if Nigeria would benefit from its gas resources.

Stressing on the evolving industry landscape, ongoing industry reforms, IOCs’ divestment, and the role indigenous exploration and production companies can play in this new era in guaranteeing the nation’s energy security, Isa said: “Nigeria cannot afford to be left behind in view of the global energy transition agenda. Natural gas should be considered as a transition fuel with deliberate policies formulated to attract investment into the sector.”

While noting that the PIA enactment will set a solid growth foundation for the entire industry, the IPPG Chairman said it was imperative that effective regulations are formulated to derive the full benefits of the Act.
According to Isa, ‘’industry-wide consultation in the enactment of regulations is required to promote inclusivity and ensure robustness of regulations’’.

The IPPG Chairman also identified key challenges being faced by the industry in the areas of security, funding, high operating costs, lengthy contract cycle, amongst others.

’’We look forward to collaborating with the NUPRC in finding long lasting and sustainable solutions to these challenges,’’ Isa said.