Nigerian Gas Association (NGA) has lamented that customers in the gas industry now owe producers N110 billion while they are running out of patient owing to insufficient fund.
President of NGA, Dada Thomas, who is also the Managing Director, Frontier Oil Limited told journalists in Abuja on Tuesday at the association’s conference, that the intervention from the Central Bank of Nigeria to the producers was still negligible.
“For instance in this conference, every session has talked about the liquidity in the power sector and that liquidity is virtually terminal. By terminal, it means the patient is already collapsing and if pushed a little bit, that’s its end. The problem in that sector needs to be fixed. Gas producers are owed more than N110 billion right now,” he said.
“You heard of the CBN intervention, but it was just a drop in the ocean. So we have a serious problem and that’s nothing but the truth. It is important to state that all Gencos who run thermal plants in Nigeria get their gas from gas producers. You can’t run a thermal power plant without gas.”
He added that 80 per cent of the domestic gas consumed in Nigeria is vended to the power plants that are still in the possession of the Federal Government despite their privatization .
The NGA president said that: “Also, 80 per cent of the domestic gas in this country today is sold to power plants. But unfortunately these power plants are still in the possession of government, despite the so called privatization which has not been properly concluded. We want the privatization of the power sector to be fully concluded.”
He expressed hope that upon full conclusion of privatization, all the plants will become the entities of the investors who will run them as proper businesses .
According to him, the producers would not vend gas on credit to the private investors but dealing with the government brings disruptions as credit denial would be interpreted as economic sabotage
He said, “When it is fully concluded, then every power plant will be in the hand of a private investor. That is when we can talk properly as business entities. For if you are a private investor I will not give you my gas on credit. You must pay me to get supply going. But with government it is such ball game, there are disruptions for they accuse you of economic sabotage and owe you all kinds of money.
“If you are a private investor and you buy this power plant today and I sold you gas for one month and I say where is my money and you keep telling me stories, after two months I’ll have no choice but to shut you off. You are a profit making organization and so why should l be subsidizing your business?
“So NGA intends to hold a forum for everybody, from the reservoir to the consumers, that means that even associations of buyers, Discos association, NBET, NERC must all sit down around the table and talk.”