About 2,000 manufacturers using gas to power their operations spend an average of N200bn a month on power generation, The Punch reports.
The reason, according to manufacturers, is their continued payment for gas in dollars instead of the local currency. Each of the manufacturers currently using gas spends an average of N113m on gas every month, a figure that is brought about by the high exchange rate. While the global price of gas goes for $2.50, manufacturers in Nigeria pay $8 for one standard cubic metre of gas.
“An operator who spent N15m a month on gas when the dollar exchanged for N150 currently spends N45m at the current exchange rate of N450/dollar,” the Director-General, Nigerian Textile Manufacturers Association, Hamman Kwajafa, said. The Chairman, Gas Users Group of the Manufacturers Association of Nigeria, Dr. Michael Adebayo, said manufacturers had been paying over N100m for gas since the regime of buying gas in dollars started two years ago.
The manufacturers listed the reversal of the policy on gas as one of the major catalysts that would make the sector rebound this year. Adebayo also said the government needed to remove manufacturers from the category of commercial consumers of gas and put them under a strategic industrial sector category.