The Nigerian Gas Association (NGA) has said that a consensus on a pricing framework will go a long way in attracting growth investments in the gas industry.
The group disclosed this during a recently held webinar.
While giving her welcome address, the President of NGA, Mrs. Audrey Joe-Ezigbo, explained that the true wealth of Nigeria as a nation is not in the abundance of gas resources, but rather in how extensively the nation is able to apply it towards value-added processes in various sectors, such as residential, commercial, industrial, petrochemical, power, agricultural, transportation, and others as highlighted by her.
Highlights of the conclusion
- According to the communique on the outcome of the virtual session, it is of great importance for players and stakeholders across the entire industry value chain to reach an urgent consensus on a pricing framework.
- This will help in attracting growth investments, secure project funding and sustain supplies. It however noted that any pricing model to be considered must take full cognizance of the peculiarities of our domestic operating environment.
- The delegates concluded that gas policies in the upstream industry, including asset renewals, should guarantee the viability of gas projects to balance the government’s revenue targets and commercial interest of investors.
- Also, the prevailing transitional pricing regime should be short-tenured to enable early migration of transactions to full commercial liberalization and allow competition to address concerns of affordability.
- The government should consider the use of direct subsidies to stimulate industrial growth rather than introduce pricing systems that distort market operations.
- The multilogues also posited that liquidity issues that hamper returns from the power sector be speedily resolved to address legacy debts and facilitate full recovery of gas revenues from the Nigerian Electricity Supply Industry.
- Government should improve the domestic operating environment with efficient factors of production to make Nigerian goods competitive in the coming AfCFTA context.
Furthermore, the delegates suggested that emerging self-funding regulatory commissions and authorities proposed in the PIB should be underpinned by the entrenchment of transparency, accountability, and measurable performance parameters to avoid abuse of office and unnecessary imposition of levies and penalties.
What you should know
- The Nigerian Gas Association (NGA) is the voice of numerous stakeholders in the gas sector within the Nigerian oil and gas industry.
- According to data from the National Bureau of Statistics (NBS), Nigeria exported Liquefied Natural Gas worth N277.6 billion in the third quarter of 2020, accounting for 9.28% of the exports recorded in the period.
- Natural gas is one of Nigeria’s major source of export revenue, and could go a long way in fuelling other sectors of the economy. Hence, extensive collaboration from stakeholders to progress the passage of the new PIB is essential in realizing broad economic aspirations.