The Gas Users Group of the Manufacturers Association of Nigeria has advised its members to settle their outstanding payment for gas in the local currency instead of dollars.
The group gave this advice recently at a press briefing held to discuss the impact of the increasing price of natural gas on the manufacturing sector.
Highlighting the challenges faced by manufacturers as a result of the rising cost of gas in the face of depreciating value of the naira, the Chairman of the group, Dr. Michael Adebayo, noted that in the light of the falling value of the naira against the dollar, it was not proper for manufacturers to continue paying for gas in dollars adding that members should henceforth settle their bills in the local currency.
He said, “In order to avoid further misunderstanding on the issue of settlement of bills with our numerous franchisers, our members are advised to pay their bills henceforth based on the naira unit cost/charges paid in the month of May, to determine payment for other subsequent months, pending the resolution of the issues raised at this press conference.”
Adebayo remarked that apart from the fact that the price of gas in Nigeria at $7.65 per standard cubic metre was too high compared to the global price of $2.50 per SCM, the sale of gas in dollars was in contravention of the Central Bank of Nigeria’s directive that businesses transacted in Nigeria must be in the local currency.
He said, “Our association considers the present situation unacceptable, given the fact that for the past one year, manufacturers have been confronted with a number of increases in the price of natural gas due to the unstable exchange rate of the naira to dollar.”
According to him, the incessant increase in the price of gas will not only be punitive but add to the woes of the sector whose growth has been hampered by energy crisis caused by power outages and high cost of petroleum products.
He urged the National Assembly Committee on Gas to intervene in the situation and prevent the collapse of the economy and the sector in particular adding that the fact that Shell Petroleum sells gas to the Nigerian Gas Company at about nine cents, NGC sells to other franchisers at $2 and the same franchisers sell to manufacturers at $7.65 was more than enough reason to worry.