NLC Tackles Fed Govt On $2.18 Gas Price Reduction

The Nigeria Labour Congress (NLC) yesterday said Federal Government’s plan to reduce the price of industry power gas from $2.50 to $2.18 is a flagrant repudiation of the agreement between it and the government. It said the proposal fell far short below expectation.

A seven – man Sub- committee on electricity tariff set up last year in its report recommended the reduction of gas sold to generating companies (GenCos) to $1.50.

Government representatives at the meeting “unanimously accepted” that the current practice of gas pricing in US dollars would be discontinued to enable gas supply to GenCos to be made payable in Naira.

The recommendation was adopted at a meeting in February this year with Minister of Labour and Employment, Dr. Chris Ngige stating that: “Nigerians will witness a reduction in the cost of electricity tariff” with the reduction in gas pricing.

However, Minister of State for Petroleum Resources, Timipre Sylva, at the 2021 Gas Stakeholders Forum in Kano said the Federal Government had approved the reduction of domestic gas prices for electricity generation from $2.50 to $2.18 per standard cubic feet (SCF).

Responding to the minister’s comments, President of the NLC, Ayuba Wabba, asked the Federal Government to reduce the pricing of domestic gas supply to GENCOs to less than $1.50 per standard cubic feet (SCF).

The NLC also asked the Federal Government to respect the agreement it reached with Labour on electricity tariff.

According to the Congress, the resolutions of the Principals (government representatives) “cannot certainly be the basis for the minuscule gas price reduction announced by Minister Timipre Sylva.”

The statement said: “Consequently, Congress demands of the Federal Government to reduce the pricing of domestic gas supply to GENCOs to less than $1.50 per SCF. We also demand that payment for gas by GENCOs should be denominated in Naira.

“Congress remains implacably committed to the ultimate reduction of electricity tariffs by N15 per kilowatt-hour by December 2021 as contained in the agreement. Congress hereby serves notice that the posture of the Federal Government to flout agreements is completely unacceptable and would be resisted.”

The NLC demanded the inclusion of Gas Companies in the Central Bank of Nigeria (CBN) and Nigerian Electricity Service Industry (NESI) payment waterfall to guarantee payments for gas and contract sanctity with GENCOs.

The NLC argued that the pricing of domestic gas for GENCOs in US dollars represented the “quintessence of underdevelopment of Nigeria’s energy sector.”

The statement added: “Therefore, the dollarisation of domestic gas supply to local power generating companies similarly feeds neatly into the debate of the commodification of the indigenous resources to forcibly incorporate the developing countries into spawned dependency.

“Hence, Congress rejected the denomination of domestic gas pricing to GENCOs in foreign currency. Rather, Congress insisted on a payment regime in Naira not only for domestic gas but also, all energy associated products, which should be denominated in local currency.”