FG To Announce New Gas Pricing Regime This Week
ABUJA, August 02, (THEWILL) - A new gas pricing regime which President Goodluck Jonathan has approved shall be unveiled this week.
Minister of Finance, Olusegun Aganga, announced this at a meeting he held with the Minister of Commerce and Industry, Senator Jubril Martins Kuye and executives of the Manufacturers Association of Nigeria (MAN).
Aganga, who is also the Chairman of the National Economic Management Team (NEMT), assured the manufacturers that the Minister of Petroleum, Mrs. Dieziani Allison-Madueke, would formally unveil the new regime this week and that implementation shall follow swiftly.
A major character of the new regime is the sectoral differentiation in pricing which favours manufacturers. This measure is a swift response to the plea made by the manufacturers at the first Growth and Employment Roundtable with the NEMT a fortnight ago.
The manufacturers had identified energy as a major challenge, accounting for about 60% of their production cost and called for quick government intervention.
Though the new regime is still kept to the chest of Government, the manufacturers have expressed delight at the new price regime which they are comfortable with, but told the ministers that most of their members would not be able to take advantage of that as their plants were not gas-powered. Also, they said that gas supply infrastructure was not available in all parts of the country.
As a short term cushion for those that cannot access gas, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austen Oniwon, agreed to direct supply of low pour fuel oil (LPFO) by the corporation to manufacturers. LPFO is used by factories in firing their boiler units to produce electric power.
Oniwon said that if the manufacturers aggregate their demand, determine frequency of supply as well as select one or two marketers to lift the commodity, his corporation would supply them directly. For longer-term solutions, Aganga hinted that coal could be an answer, besides gas.
The manufacturers also asked the Minister of Finance to remove the value-added tax (VAT) they pay on fuel, arguing that the tax was on consumption of finished products, whereas fuel is a production input for them. Aganga promised to review the issue.
Senator Kuye lauded the cooperation he was getting from Aganga in tackling the challenges of the manufacturing sector.
The MAN delegation was led by its Vice President, Tunde Oyelola.