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Gas pricing: Put manufacturers under strategic industrial sector—MAN tells FG

The Gas Users’ Group of the Manufacturers Association of Nigeria (MAN) has appealed to the Federal Government to save the sector by considering the group under the strategic industrial sector so that they can be competitive in using gas to power their factories.
Chairman of the group, Dr. Michael Adebayo, in an interview said “We are only appealing to the federal government to put manufacturers under the strategic industrial sector, because there is no way we can buy at an old price and remain competitive at the global market.”
According to him, “With the meetings we have had so far, the commercial industrial sector is going to be $4.85 cent compared with the $7.87 which the franchisers are currently selling while the strategic industrial sector will be $4.15 cent compared with the $7 as it was being sold before.
“So, I think the effort by the government is laudable and we can only appeal for their continuous support for the manufacturing sector”, he added.
However, giving an insight, the Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, noted that “I understand the concerns of gas operators. The price is already being regulated and there are so many things wrong with the industry that needs to be fixed and, in the process, government has to decide its priority and this is the point we have always been raising.
Industry analysts had argued that as far as gas operators are concerned, the current Domestic Supply Obligation (DSO) procedure that allocates arbitrary pricing on gas supplied by the upstream gas producers without considering the viability of such pricing does not work, and is a disincentive to gas producers investing in the gas infrastructure required to utilise Nigeria’s vast gas reserves.
On the other hand, the contended that imposing arbitrary end customer gas prices on downstream gas distribution companies without considering investment made to develop the gas distribution infrastructure and the cost of operating and maintaining the infrastructure will have a similarly damaging effect.
Ajayi-Kadir further averred that “The manufacturing sector deserves a fair share of support from government and if you do not do that by a kind of special regulation, you are going to end up having less attention paid to a sector that is critical to our national development. Yes, regulation may not be desirable, but necessary at this point to support the sector.
“Already, some sectors are enjoying the price regulation, but what we are asking is that the manufacturing sector deserves that recognition in that regard because of the multiplier effect of a thriving manufacturing industry which has been proven everywhere in the world, Ajayi-Kadir opined.