The Nation Newspaper

Tag: cost

  • Cost of not disowning Saraki

    Again, let us remind ourselves how we got to this sorry pass. For ease of administration, the framers of our constitution expect the ruling party with a majority to produce the Senate President and deputy.  But Saraki after cutting a deal which ceded the deputy senate presidency to the opposition, capitalized on the absence of 51 of his elected APC colleagues to be adopted Senate President by 49 PDP senators and eight APC senators. Itse Sagay described Saraki’s coup as ‘a victory for impunity, a victory for fraud and a victory for political desperation and indiscipline”, while Auwalu Yadudu, former Dean of a Faculty of Law, Bayero University Kano dismissed it as ‘lies in the face of democratic ideals’ since Saraki’s emergence stemmed from ‘a flawed election by a fraction of yet-to-be-constituted Senate.

    With the unwavering support of 51 betrayed APC senators, this column had suggested APC should wield the big stick by disowning Saraki for his perfidy. But the party decided to play the ostrich and by default gave Saraki time to cut further deals with some marketable commodities driven only by greed in the Senate.  With power of patronage obtained albeit immorally, Saraki soon had 82 ‘like minds senators’ who shared his world-view in his pocket. But last week, Chief John Odigie-Oyegun, the National Chairman of APC was reported to have foreclosed the possibility of the party losing the senate presidency to the opposition but was also quick to add ‘sometimes, for change to take place, there is price you have to pay. So losing the position may be sacrifice for change.” Unfortunately what Oyegun is now trying to do is locking the stable door long after the horse had escaped. The party lost the control of the Senate the moment Saraki, the veteran dealer sold the deputy senate seat to the opposition.

    APC decided to play the ostrich long after Saraki, who was haunted out of PDP over haggling over sharing of loot (He was the whistle blower in the N1.6trillion fuel scam involving some PDP leading lights and their children who in turn identified a company in which Saraki had an interest as beneficiary) had made a choice of returning to his vomit. It was obvious to discerning Nigerians except APC leadership that Saraki’s strategy was to adorn APC toga of change while working feverishly to undermine the party’s anti-corruption war with the connivance of defeated PDP national wreckers. Had APC wielded the big stick, Saraki would have been fighting his current battle with CCT not as the third most powerful figure in APC government but as part of discredited PDP that looted Nigeria through NNPC, PPPRA, privatization and monetization policies. Saraki would have been in the midst of his unpatriotic PDP members who shared $2.1 loan meant to buy arms to fight insurgency that has killed over 18,000 innocent Nigerians and rendered about two million others refugees in their own country.

    APC is therefore responsible for the nation’s current nightmare. Most Nigerians knew a Saraki/Ekweremadu Senate as an offshoot of David Mark/Ekweremadu Senate that looked the other way while their PDP members stole the country blind would continue business as usual. Predictably, the Senate remains a senate of shame while the House remains house of deals. An institution whose essence besides making laws, and amending budget or repealing public policy is to guarantee freedom and prevent tyranny is intolerant of dissent even among its ranks. While Saraki supporters insist the call on him to account for deals he made some 12 years earlier is an attack on the Senate as an institution, Marafa who disagreed claiming “What is happening in the CCT is personal to Saraki and has nothing to do with his position as the Senate President’ was recommended for suspension Senator Anyawu-led committee.

    The 2016 Budget was submitted to the House in December last year, Audu Ogbeh, the agriculture minister and his team early this week discovered 386 “strange” projects worth N12.6billion reportedly inserted by the National Assembly in the ministry’s budget proposals. That was not before the House had reduced ministry’s budget proposals fromN40, 918 billion to N31.618 billion to accommodate their own constituency projects which for years served only as conduit pipes. The Minister of Transport raised an alarm about the cancellation of the Lagos – Calabar rail project. We now know it was partly to accommodate Dogara’s N3b constituency projects as well Abdulmumin Jibrin, Chairman, House Committee on Appropriation’s constituency projects such as provision of tricycles, town halls, classrooms, solar street lights, and pedestrian bridges. This is the mindset of those who adopt ethnic balancing to impoverish the north by pretending to fight for the north. This was what informed Nuhu Ribadu’s (former EFCC chairman) sad conclusion that ‘the 19 northern state governors and the 414 local governments have nothing to show for the N8.3 trillion that accrued to them between 1999 and 2010.’

    Sadly in both Houses controlled by APC, it is business as usual.  Ex-governors as senators are drawing N1.2m pension along with their undisclosed huge salaries that rank as one of the highest in the world and greedy lawmakers after obtaining car loans, went ahead in spite of Buhari’s call for caution to buy 108 exotic cars at a cost of N35.1m a unit at a time about 25 states of the federation cannot pay the minimum wage of N18, 000. In return for their pains, we have  a  National Grazing Reserve Bill which will establish a National Grazing Reserve Commission (NGRC) using federal government fund to acquire farm lands from the 36 states of the federation for private cattle farmers, perhaps as compensation  for the killing of thousands of innocent Nigerian farmers by Fulani herdsmen already declared by the UN as one of the deadliest  terrorist groups in the world  with nothing being said about their victims;  the Senate Committee on Ethics, Privileges  and Public Petition headed  by an Anyawu, notorious only for following Saraki to  Code of Conduct Tribunal, summoning the chairman of the Code of Conduct Tribunal, Danladi Umar who had just ruled that Saraki’s trial for alleged falsification of assets will run on daily basis, over a petition against his assistant. And there is also an on-going self-serving attempt by the two houses  to amend the Code of Conduct  Bureau  Tribunal Act and Administration of Criminal Justice Act, all aimed at sabotaging President Buhari’s anti-corruption war.

    But Nigerians who performed their own patriotic duty of voting out inept and corrupt PDP government are holding Buhari and APC responsible for their nightmare. If Saraki had been disowned after demonstrating he cannot be a trusted ally in the battle for change, disillusioned  Nigerians would have been reassured that the current raging battle is between forces of darkness  that  shared our national patrimony  and mortgaged the future of our children and forces of  light trying to usher in the much desired change. But APC cannot afford to fail those who have internalized its message of hope.  The party must reinvent itself by publicly disowning Saraki and his fellow travellers in the Senate of shame and in the House of deals. Impoverished Nigerian victims of PDP’s 16 years crime against our nation are tenaciously holding on to Jega’s Permanent Voters Cards, (PVC), and a veritable weapon against greedy and self-serving corrupt politicians.

  • INEC decries cost of re-run elections

    Prof. Mahmoud Yukubu, the Chairman of Independent National Electoral Commission (INEC), on Wednesday decried the cost of conducting re-run elections in the country.

    Yukubu made this known at a National Conference for Justices of the Court of Appeal and Election Petition Tribunal Judges with the theme “2015 Election Petition Tribunals and Appeals” in Abuja.

    He said it was more challenging to manage re-run elections arising from candidates’ disqualification.

    According to him, while it is appreciated that the courts treat each case on its merits, certain trends point to conflicting judgments on similar cases by different Judicial Division of the Court of Appeal.

    He said there were instances where elections were nullified and INEC was ordered to conduct a re-run simply for the sake of conducting elections in a specific polling unit.

    Yakubu said after wasting time and resources, the outcome of such election did not make any material difference to the original result declared by INEC which made substantial compliance with the Electoral Act.

    He cited the case of Lafia/Obi Federal Constituency in Nasarawa State, where Appeal Court ordered INEC to conduct a re-run in Angwan Doka Polling Unit 004 with just over 1,000 registered voters.

    He said the candidate declared winner by INEC in the 2015 General election pooled over 74, 000 votes while the runner-up had a little over 70,000 votes.

    Mahmoud said the number of registered voters in the polling unit could not have altered the result in any way and even the voters were aware of the reality.

    “When INEC conducted a re-run election in that polling unit only 25 voters turned up to cast their votes and the election which has no utilitarian value cost the nation N3.2 million,” he said.

    He said that 680 election cases were filed against INEC after the 2015 General elections and 580 out of these cases were dismissed by the tribunals and Court of Appeal.

    Yukubu said that the commission had no judicial powers over the outcome of the elections it had conducted.

    According to him, each time an appeal court determines a case, the commission is always ordered to undertake one form of consequential action.

    In her speech, the President of the Court of Appeal, Justice Zainab Bulkachuwa, said that the court received 749 appeals emanating from the decisions of the various election petition tribunals.

    Bulkachuwa said in spite of the challenges of time, the justices of the court had managed to dispose the appeals within the stipulated period as required by law.

  • Prohibitive cost

    • Nigerians are to cough up N26.5bn fine incurred by an overreaching Federal Govt

    The arbitration award, asking the Federal Government of Nigeria to pay Resort International Limited the sum of N26.5 billion for breach of contractual obligations underscores the defects in some of the laws guiding relationship between the Federal Government and the states. The award arose following the inability of the Federal Government to secure a no-objection status from the Lagos State government, which rightly claims a reversionary interest in the old Federal Secretariat, Ikoyi, Lagos, which the Federal Government unilaterally handed over to the company to develop into residential quarters.

    The dispute underlines the distortions and challenges inherent in the provisions of the Land Use Act, and the foggy but touted overriding interests of the Federal Government, in a matter that should exclusively fall within the purview of state legislation. While the private firm should be entitled to the sanctity of a contract duly consummated, albeit by an unthinking Federal Government, our common purse is now compelled to shell out a humongous N26.5 billion because of that lack of foresight by some officials who think of the Federal Government more as a leviathan.

    True to type, the Lagos State Government, in line with its robust constitutional activism, particularly since 1999, proactively intervened to ensure that a land appropriated by federal authorities for public use cannot be turned to private use, without considering the interest of Lagos State which constitutionally bears responsibility for the physical and environmental impact of that decision. The state government’s argument that it is indeed entitled to a reversionary right or interest where the Federal Government which took the place to develop a secretariat no longer needs the land for such a purpose, also makes sense.

    The fine of N26.5 billion ordered from our common patrimony, painful as it is, is a pointer, as in many other cases, that our laws have not made enough demarcation between the rights and privileges of the Federal Government and the states. This is even more instructive with respect to the ownership of land, since the promulgation of the Land Use Act. The tension between the Federal Government and the states also plays out between communities and states, with each interest fighting over the exercise of rights of ownership over land, which the Land Use Act vests in the governors of the states.

    In our view, the Federal Government’s officials, in seeking to convert the former Federal Secretariat to a residential apartment through a partnership agreement with a private firm, without putting the interest of the state in view, manifested a gross abuse of its powers and privileges. No doubt, the actors were hoping to ride rough shod over the legal and equitable interests of the state government, expose her to physical planning nightmares and unplanned expenditure for the provision of infrastructure for the new residents. The import will be that while the Federal Government and its partner, Resort International Limited are smiling to the bank, Lagos State government will be agonising on how to raise the resources to meet the imposed challenges.

    Even though an award has been made, we ask, was legal due diligence conducted by the parties before the contract was consummated? If that was done, we believe it would have exposed the limits of the powers of the Federal Government to unilaterally convert a land appropriated for a public purpose to private use, without factoring in the interest of the host state. Now that an award has been made, it will be fair to ask the Federal Government to exhaustively explore all the available legal opportunities to overturn the award, and if it loses, to pay.

  • Nigeria loses N1tr yearly to oil production cost

    • Reps to reduce  $38 oil benchmark

    Nigeria loses an average of N1 trillion yearly as production cost in the exploration of crude oil, Chairman, House of Representatives Committee on Appropriation, Abdulmumin Jibrin has said.

    The lawmaker, who spoke with reporters  on the 2016 budget yesterday said there is a need to look closely at the aspect of cash calls related to the production of crude oil.

    Jibrin also said in the face of dwindling oil revenue, the House of Representatives is set to reduce the benchmark in the 2016  budget to a “realistic” figure.

    Members of the Green Chamber are also to engage with the Central Bank of Nigeria (CBN) to see if it is possible to adjust the exchange rate as passed in the budget.

    He said: “One very important aspect that swallows a large chunk of the money in the budget is the cash call and production costs. Many people take their eyes away from production costs.

    “But it is critical, this is because every year we pay an average of N1 trillion  as cost of production. So, it is important that this time around, we need to sit with relevant authorities in the oil and gas sector to see the details of this production cost, to ensure  the country is not just being shortchanged.

    “We are just mopping a lot of money from the first line charge just to give to our foreign partners.

    On the benchmark, he said:  “The benchmark has been pegged at $38 and of course we have known that the oil price has gone much below that figure. I am sure that during this budgeting period, we will engage again  with the Committee on Finance and relevant committees and we should be able to peg the benchmark at a very safe figure that should be more realistic.

    “Of course, the benchmark is one of our concerns and the revenue aspect of the budget. One you have raised the issue of benchmark which we are going to work on to see that we peg it in what looks more practicable, then of course, there is the aspect of the non oil.

    “The non oil of  course, the projection looks realistic but if you go by history, we must also be extremely disciplined to ensure that the projections are met month after month; so, we are not unmindful of that.”

    Commenting on exchange rate, he said: “On the aspect of the exchange rate, it is an exclusivity of the CBN but of course we do engage them. The CBN usually comes up with justifications for pegging the exchange rates.

    “The CBN is an autonomous body, it is independent, so, we don’t tamper with that. But again within this period, we will still engage the CBN so that we can be able to discus with them if there are some possibility of any adjustment. Otherwise, in terms of exchange rate, we leave it as the CBN recommends to the National Assembly.

    “And very quickly also, there is the aspect of the budget of deficit financing, we are also concerned about that, in the next few days, we will be also going to engage the executive particularly, the Minister of Finance and  the Minister of Budget and Planning, so that we can really be sure how the deficit is going to be financed.”

    Jibrin said said there is need to reduce domestic borrowing and increase external borrowing in implementing the budget.

    “Generally the position of the National Assembly is  that we need to reduce domestic borrowing significantly, we expect that a chunk of the borrowing should come from external sources,”he said, adding that the economy is struggling “and when you now put so much weight on the local economy in terms of drawing more money, it is going to do a lot of harm to the economy.”

  • Traditional medicine has reduced cost of health services, says expert

    Traditional medicine has reduced cost of health services, says expert

    •Group’s leaders sworn in

    The cost of health services has been reduced, with the approval granted traditional medicine practitioners almost 10 years ago, an expert, Dr Idowu Ogunkoya has said.

    Speaking at the inauguration of the National Association of Nigerian Traditional Medicine Practitioners (NANTMP) in Lagos, Ogunkoya said traditional medicine’s importance could not be over-emphasised.

    Ogunkoya, who chaired the group’s electoral committee, described it as a non-partisan body.

    He said: “It is not owned by any ethnic group or group of individuals. Members of the executive  will hold office for a tenure of four years only and relinquish their office to another democratically elected executive. A Board of Trustees is appointed to hold office for one single term of five years and a new board is appointed as NANTMP constitution requires.”

    Ogunkoya said:“The importance of Traditional Medicine in Nigeria cannot be overemphasised. It is a holistic health providing sector,  creating jobs, supporting agriculture and its derivatives in its own capacity; traditional medicine reduces cost of health provision and related services in a country that recognises and legalises it, such as Nigeria.

    Mr Andrew Akarachi Anyanwu emerged  national president with 42 votes, against Usman Ibrahim, Sunday Gbakanlado and Dada Nakowa scored zero vote, Ibrahim Jawa eight votes, Muhammed Salih Damansani 16 votes, and Baba Ejiga, 38 votes. Shaba Mekudi Sani is the deputy president; vice-president 1 (South-west) Samuel O. Banjo, vice president 2, (South east) Cyril Okwudili Umezele, vice-president 3 (South-south) Igene Mutairu, vice president 4 (North-west) Halihu Ashiru Maikada, vice president 5 (North-central) Muhammed Baba Beji.

    Prof Dayo Oyebanjo Oyekole as secretary general, assistant secretary Adeagbo Kamorudeen Kunle, treasurer, Franca Nkem Mordi,  assistant secretary,  Hakeem Atanda and Ikechukwu John,  public relations officer (PRO).

    The election was held last December 15 at the National Centre for Women Development, Abuja. Three delegates were chosen from each state of the federation including Federal capital territory (FCT).  108 delegates were accredited. Candidates were allowed to campaign and defend their manifesto for two minutes. The voting started at 1pm. Unopposed candidates took the floor to tell the delegates about their qualities and how they will move the association forward. They said  being unopposed candidate showed that they would deliver.

    John Okeke polled 30 votes. Regina Ikenwilo, 34 votes and Cyril Okwudili, 38 votes to emerged Vice President Southeast. Vice President, North West- Saad Isa Ahmed, 35 votes, Ashiru Makaida 70 votes; Secretary General- Elder Jacobs, 36 votes, Dayo Oyekole 61 votes. National Treasurer- John Bubba, 47 votes,  Franca Nkem Mordi 57 votes. Deputy President- David Akan 12 votes, Lateef Adeyeye 16 votes, Shaba Mekudi Sani 75.

    Ogunkoya said supplementary election would be conducted for Vice President, Northeast and Auditor- General.

  • Bakare urges govts to reduce cost of governance

    Bakare urges govts to reduce cost of governance

    •Cleric advises Buhari to adopt conference report

    LAGOS preacher Pastor Tunde Bakare has advised governments to cut cost by reducing political appointees and what they earn.

    The Overseer of Latter Rain Assembly, in his State of the Nation broadcast during yesterday’s church service, said: “If we are serious about sound financial management, a more significant reduction in the size and cost of running government will be required than this administration has been able to effect.

    “The government re-sizing process has been hampered by structural anomalies and constitutional constraints.  For instance, of what use is a bloated legislature that could potentially gulp 25 per cent of the national recurrent budget?  Of what use is a profligate governmental structure characterised by minuscule but treasury-draining federating units? Of what use is a constitutional provision for the appointment of 36 ministers even when we have no need for so many?

    “As for the state governments, care must be taken not to provoke the rage of poorly paid civil servants by reducing the minimum wage of impoverished workers. What they should do is devise a reasonable policy direction that will lead to a reduction in the salaries of politicians and political appointees, reduce security votes, trim the size and cost of governance, and embark on revenue mobilisation strategies.”

    To rise out of the financial conundrum, Bakare suggested that President Muhammadu Buhari should pursue true federalism, empowering the geopolitical regions to develop economically as in the past.

    The cleric urged the President to consider the report of the 2014 National Conference, which he said reflected the pre-election promises of his party, the All Progressives Congress (APC).

    He said: “I appeal to Mr. President not to ignore the report of the 2014 National Conference! God went ahead of you to provide a navigational map with which you can begin to steer the ship of state to a safe destination.

    “The APC may have refused to participate in the 2014 National Conference, but the report of that Conference is in tandem with the promise of the APC manifesto. The APC manifesto and the report of the 2014 National Conference are a tag team in waiting, not a thesis and antithesis.

    “Just as this government adopted the Integrated Personnel and Payroll Information System (IPPIS), the Government Integrated Financial Management Information System (GIFMIS) and the Treasury Single Account (TSA) , which were conceived by the Goodluck Jonathan administration, the Buhari-led government should embrace the report of the 2014 National Conference. That report may have been produced under a PDP government but it is not a PDP document. It is a Nigerian people’s document. Delegates to the 2014 National Conference, East, West, North and South endorsed the report without a single vote on any issue.”

    In addition to Buhari’s efforts on deregulation and diversification, Bakare advised him to add devolution, which would involve reviewing the structure forms of government.

  • Illicit financial flows cost Nigeria $83.3 billion

    NIGERIA lost $83.3 billion from 1960 to 2011 through illicit financial flows, Africa Development Bank (ADB) Country Office Director, Dr. Orismane Dore has said.

    Dore, who spoke at the Chartered Institute of Bankers of Nigeria (CIBN) Investiture, held in Lagos, said the loss arose from over invoicing of imports and under-invoicing of exports.

    Speaking on the theme: “Diversifying the Revenue Base of the Nigerian Economy: Strategy Options”, Dore, represented by the Chief Economist, AfDB, Nigeria Country,  Zerihun Alemu, said the time to diversify the economy is now should be done by improving tax reform and tax administration to include potential additional tax payers. He said 75 per cent of Small and Medium Enterprises (SMEs) were not in the tax system.

    Improving the tax system, he said could help in boosting the  revenue base, adding that Federal Inland Revenue Service (FIRS) reports showed that 65 per cent of registered tax payers have not filed their tax returns.

    He advised that tax collection be monitored to minimise tax exemption abuses under pioneer status, local content, export promotion, among others, adding that 30 per cent of companies abuse their tax exemption status.

    Dore said the non-oil revenue is low due to low tax effort, where non-oil revenue to non-oil gross domestic product (GDP) is 4.6 per cent compared to 15 per cent low income economies and 19 per cent in emerging economies.

    He cited low tax efficiency, low Value Added Tax (VAT) collection efficiency due to compliance issues and need for tax reform for  the non-oil revenue mobilisation as measures that would help in diversifying the economy.

    The deputy governor of the Central Bank of Nigeria (CBN), Corporate Banking, Mr Adebayo Adelabu, said the country is experiencing tough times in the economic sphere because “we lost the opportunity to diversify the economy between 2009 to 2014 when there was stability in the economy and oil boom is the order of the day”.

    Adelabu said diversification of the economy is a task for everybody, the government and the organised private sector (OPS) , as increased focus on agriculture, solid minerals and import substitution to promote local industries as being championed by the current regime will help the economy greatly.

    The President/Chairman of Council, CIBN, Mrs. Debola Osibogun, in her welcome address said the theme of the investiture is apt at this moment as non-oil revenue declined by 34 per cent at the end of the first quarter of 2015 from the all time high of $3 billion it attained in 2011.

    Osibogun, on the investiture, said the number of bankers honoured is the highest ever done by CIBN, which portends great things for the banking and financial sector, as she seeks continued professionalism from the bankers.

  • Govt urged to reduce fish feed cost

    Fish farmers have urged  the Federal Government to reduce the cost of feed to make the industry attractive to Small Medium Enterprises (SME) and investors. Feed is said to  constitute  70 per cent of the cost of production.

    Speaking at an aquaculture value chain investors’forum in Lagos, with ‘Reducing the cost of fish production in Nigeria’as its theme, the Executive Director and Chief Executive Officer, Nigerian Institute for Oceanography and Marine Research (NIOMR) Gbola Akande said if the government sponsors long-term and low-interest loans with simplified borrowing procedures, it would reduce the cost of production and stimulate expansion of the fish farming industry.

    He called on the government to look into agricultural subsidy, ensure low interest rate on credits to farmers, and ensure moratorium periods and subsidies on aquaculture inputs especially fish feed.

    He added that government should make available soft loans to fish marketers to make farmed fish affordable to consumers, stressing that there is need to source a local fishmeal to replace the foreign fishmeal.

    President, Lagos State Catfish and Allied Farmers Association (LASCFA), Mr Femi Ajala, called on government to remove all tariffs on agricultural inputs such as extruders, fishmeal and plants, in effort to make locally produced fish feeds to compete favourably with imported ones.

    He said tariffs on fish meal which is key ingredients in the production of fish feeds should be removed.

    Chairman, Lagos State Chapter, Fishery Society of Nigeria, Habeeb Giwa, said the imported fish feeds means a lot of revenue and it drains our naira.

    Giwa called on the government to provide the facilities to produce fish feed in the country and urged other stakeholders to contribute to making the fish feed as cheap as possible.

  • ‘Improve agric supply chain to cut cost’

    A former Chairman, Federation of African Nutrition Societies (FANUS) and Executive Council Member, International Union of Nutritional Sciences (IUNS),Prof Tola  Atinmo,  has  urged the  government and the private sector  to focus on  cutting  waste , farmers losses  by improving the efficiency of the  supply chains.

    According to him, there are several reasons the agric sector is recording so much loss. These, according to him, include poor transportation facilities which is not helped by the absence of road access to the farms. While there are few cold-storage centers and refrigerated trucks, he said   lack of  good  roads, is not  facilitating  nationwide distribution considering that up to half of the food will be lost.

    With the looming challenge of escalating logistics costs across the cold chain, he called for the implementation of measures to  tackle   logistical hurdles and infrastructure challenges.

    He   explained that the  government  needs  to  address  the  practical  challenges in ports, airports and the  roads  across the entire perishable supply chain from farmer  to retail shelf.

    In order to develop more effective supply chain, he said transport infrastructure and ports need to be improved and become more reliable, adding that ineffectiveness was driving the high cost of production and freight, which is passed back to the growers.

    According to him, farmers would make profits if the government and the private sector improve infrastructure end-to-end fresh food supply chain by reducing spoilage and waste.

    With refrigerated vehicles, he said temperature problems can be fixed but this also requires a long-term, involving changes to processes and equipment to manage the supply chain effectively.

    He   warned that the problems of equipment shortage  was  affecting  farmers and  producers ,calling  for  more  capital investment to improve the nation’s  logistical competitiveness.

    According to the government needs to engage more proactively with the private sector in order to tackle operational constraints and to become generally more demand-driven.

     

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  • Why cost of cooking gas is high, by NLNG

    •Firm has helped in flaring reduction

    The Nigeria Liquefied Natural Gas Limited (NLNG) has attributed the high cost of liquefied petroleum gas (LPG) to logistics and lack of infrastructure.

    The General Manager, External Relations, Nigeria LNG, Dr Kudo Eresia-Eke, made this known during an interaction with reporters in Lagos.

    He said the cost of LPG (also called cooking gas) is supposed to be cheaper than it is, but owing to some factors, off-takers of the commodity add the extra cost they incur, making the end-users pay more. The price of 12.5kg cylinder of cooking gas is about N3000 in Lagos.

    He explained that if the infrastructure is available, the product would have be supplied from NLNG’s Bonny plant in Rivers State to Lagos, and to consumers but for lack of infrastructure, the product is delivered through vessels (ships). The ships take the LPG from Bonny to Lagos from where it is pumped into tanks at depots.

    Eresia-Eke said the intervention of NLNG has reduced the cost of the gas. According to him, supply of LPG to domestic market was not initially planned, but the company started the supply of LPG to the domestic market in 2007, when the refineries were down and supply affected. Now, the problem of inadequate supply had solved, he added.

    He said: “The intervention, which is in line with company’s vision of helping to build a better Nigeria, has significantly contributed to the stimulation and development of the domestic LPG market in Nigeria and has effectively brought down the price of cooking gas from over N7,000 in 2007 to less than N3,500 per 12.5kg cylinder today.”

    He added that NLNG is committed to delivering 250,000 tonnes of LPG yearly and has signed sales and purchase agreements (SPAs) with 15 off-takers for the lifting of LPG for the domestic market.

    Eresia-Eke also said the company has made huge gains on gas flaring.

    According to him, gas flaring was within the range of  50-70 per cent, but now it is about 10 per cent. He said the NLNG has created impact in gas flaring reduction, but noted there is still more to be done.

    He said because the interest of oil firms was in oil, gas then was a nuisance. ‘’Because you have to get rid of the gas before you get the oil, associated gas was flared. That is one of the fundamental reasons for the establishment of the NLNG, to contain the menace of gas flaring,’’ he added.

    He said there is almost an equation of pricing irrespective of location on the world stage as of today.

    “The major thing that has occurred in terms of NLNG and gas flow is the related technology in place. In the market, it is obvious that supply is so high; however, the price is very low. One thing is sure, it can no longer be what it used to be in terms of purchasing energy, cost and technology; and no one knows how it will end,” he said.