Despite the commitment of government to make gas production in the country attractive, the Nigerian Gas Association (NGA), has said the inconclusive nature of the power privatisation by the Federal Government was making it difficult for gas producers to recoup their monies for gas supplied to power plants.
“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 privatisation which has not been properly concluded. We want the privatisation of the power sector to be fully concluded,” Dada Thomas, newly inaugurated President of the NGA, said in an interview with journalists on the sideline of the just concluded Nigerian Gas Association Conference in Abuja on Tuesday.
“In this conference, every session has talked about the illiquidity in the power sector and that illiquidity 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 N110bn right now”, he stated.
Thomas who is also the Managing Director, Frontier Oil Limited, explained that the CBN intervention to upset the bills 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.
“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 organisation and so why should l be subsidising your business?
According to Thomas, the NGA intends to hold a forum for everybody, from the reservoir to the consumers, associations of buyers, Discos association and NBET aswell as NERC to sit down around the table and talk the issues over.
