Operators in Nigeria’s power and petroleum sectors believe that the Federal Government’s regulation of domestic natural gas pricing appears to be easy to accept theoretically but difficult to sustain in practice. According to them, the challenge with implementing a regulated pricing regime in the domestic market is exacerbated by the widely divergent interests of major players in the industry. They also note that one of the most significant challenges to sustainable gas pricing in Nigeria is the illiquidity of the country’s power sector, as this has severely impacted negatively on the fortunes of the nation’s gas producers.
They say the liquidity squeeze in the power sector, among other concerns, need to be addressed in order to get adequate pricing for natural gas, as well as grow power generation and supply in Nigeria. The key dilemma in Nigeria is that while lower gas prices are needed to encourage gas demand and support local industries and power generation, cost-reflective prices are needed to stimulate investment in gas infrastructure and assure supply sustainability.
Findings show that the scale of the problem is further compounded by the fact that the various domestic demand sectors have varying capacity to accommodate cost-reflective gas prices. On the other hand, competitive tariffs in international markets can create a preferential pull for exports at the expense of the domestic market if regulated pricing results in lower returns on investments or inability of the gas supplier to cover its costs.
Fashola Retracts Promises To Provide Details Of Corrupt Contractors – Ripples
The Minister of Power, Works and Housing Mr Babatunde Fashola SAN has written to Socio-Economic Rights and Accountability Project (SERAP) promising “to refer the request for details of alleged contractors and companies that collected money for electricity projects and failed to executive any projects to the Ministry’s agencies for necessary action and appropriate response.”
Mr Fashola’s latest response followed his letter to SERAP last month in which he said: “We have searched the Ministry’s record and the information you applied for is not held by the Federal Ministry of Power, Works and Housing (Power Sector).” However, SERAP disagreed with the response, saying: “The public expectation is that government information, when is in the hands of any public institutions and agencies, should be available to the public, as prescribed by the FOI Act. The FOI Act should always be used as an authority for disclosing information rather than withholding it.”