Forex scarcity hits gas suppliers, price hike imminent

There are indications that gas prices may continue to climb, and Nigerians may pay more, since marketers have suggested that the high dollar–to-naira exchange rate has a negative influence on imports.

In an interview with The PUNCH on Sunday, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Mike Osatuyi, stated that independent marketers sourced dollars for importation from the black market; consequently, gas prices would continue to rise until the naira strengthened at the exchange market.Infomation Guide Nigeria

He warned that as long as the currency continued to appreciate, gas consumers faced the possibility of additional price increases.

The PUNCH has learned that gas output from the Nigerian Liquefied Natural Gas Ltd, NLNG has plunged in addition to poor gas supplies on the world market, which are mostly owing to the Russian-Ukrainian war.

According to sources with knowledge of the situation, NLNG was operating at 60 percent capacity as a result of high-level theft and oil and gas pipeline vandalism.

In addition to “feed gas constraints” and “high maintenance activities,” the source listed “feed gas constraints” and “high maintenance activities” as contributing factors.

The output and export from NLNG’s six-train Bonny plant decreased to 16,8 million tonnes in 2021 from 20.7 million tonnes in 2020 and 2019 respectively.

According to the company’s General Manager, Production, Adeleye Falade, who spoke at the 45th Nigeria International Conference and Exhibition 2022, NLNG has lost close to $7 billion in revenue so far in 2022 as a result of gas supply problems.

Global natural gas markets have been tightening since 2021, and global gas consumption is anticipated to fall by 0.8% this year as a result of a record 10% decrease in Europe and flat demand in the Asia-Pacific region, according to the IEA’s quarterly report on the gas market.

In recent years, Nigeria’s oil and gas industry has been plagued by persistent underinvestment and the recurring problem of oil theft from pipelines.

OPEC records indicate that Nigeria’s crude oil exports reached a historic low of 900,000 bpd in August, the lowest amount ever recorded for the country. In August, the country was 700,000 barrels per day short of its OPEC quota.

As a result, The PUNCH has learned that international clients who have booked gas supply are currently suffering anxiety as the nation’s Bonny Island output falls to a record low.

The main importer of Nigerian goods, Portugal, has raised concern over supply.

Oil majors have reduced their investments in Nigerian supply, while a number of foreign corporations have either sold assets or expressed their intention to divest.

Other Top Stories:

• FG plans N854.8bn for pensions in 2023
• CBN loans to FG hait N22tn, analysts kick
• Full speech: Buhari proposes N20.5tr budget for 2023
• INEC struggling to implement Electoral Act, alleges IPAC

Duarte Cordeiro, Portugal’s European Union, EU Environment and Energy Minister, stated that his country could suffer supply challenges this winter if Nigeria does not deliver all of its supplies.

“From one day to another, we may have a problem, such as not being supplied the volume of gas that is planned,” he said in Lisbon, adding that the country was already considering alternative supplies.

The PUNCH learnt that Nigeria’s other European countries are also considering alternative supplies due to uncertainties from NLNG.

Oil and gas expert and analyst, Dr. Dauda Garuba, described the low gas production as “double tragedy for Nigeria,” adding that the country faced tougher times in terms of revenue.

“This means the country should expect lower revenue. These are tougher times for Nigeria because when we have less to export, then, we would be counting our losses,” he said.Jamb Result

📢 We are hiring writers!