• Monday, April 22, 2024
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Stakeholders call for domestication of gas with FG, CBN N250b intervention

Stakeholders call for domestication of gas with FG, CBN N250b intervention

Stakeholders have called for the domestication of Nigeria’s gas resources especially with the N250 billion intervention fund released by the Central Bank of Nigeria (CBN) in partnership with the Ministry of Petroleum Resources.

With over 50 per cent of the resources being imported into the country despite huge gas reserves hovering above 206 trillion standard cubic feet, experts believe domestication could reduce the price, spur investment opportunities, reduce burden on foreign exchange, provide unemployment and strengthen the development of the downstream sector.

Speaking at an industry event, the Executive Director, International Support Network for African Development (ISNAD-Africa), Adedoyin Adeleke stated that if Nigeria continues to import over 70 per cent of gas products, especially LPG without domestication, boosting local utilisation at an affordable rate could be a mirage.

“The importation of LPG inflates the cost of gas in the country making it unaffordable for most Nigerians. Coupled with the increasing cost of living in the country, increasing unemployment, unabated increase in poverty rate; the vast majority of Nigerians will be pushed to resort to fuelwood for cooking hence increasing deforestation in the country,” Adeleke said.

According to him, there is a need for the government to attract, induce and support the private sector for massive investment in gas production in Nigeria.

Adeleke noted that the consequent exclusion of importation associated cost, economies of scale and participation of multiple players would catalyse competition which would crash the price of LPG in the country.

“Local production for local consumption is the way,” Adeleke said.

He admitted that although it is good to export gas, local consumption should also be a priority.

Read also: Stakeholders seek leeway as FG, CBN address autogas loopholes

“Farmers do not sell their seeds, Nigeria must not continue to sell out the seeds that could catalyse her much needed development, yet without undermining the sustainability of our environment, conservation of nature, and loss of biodiversity,” he stated.

Another energy expert, Charles Majomi noted the market is likely to tighten further as uncertainty around finance and investments in fossil fuels projects, brought about by the advance of renewables, is likely to cause a pull back in upstream production.

According to him, the development will lead to firewood being the cheapest alternative, high female mortality and increased deforestation, which will have negative environmental impact in the rural zones and lead to more economic hardship for the Nigerian masses.

Ghana National Petroleum Corporation, Petroleum Commerce Research Chair, University of Cape Coast Oil & Gas Studies, Prof Wunmi Iledare, lauding the intervention fund in the value chain said: “Significant amount of investment is required to translate the reserves to usable form.

“Petroleum production is good for nothing, if its development does not improve the quality of life of the people, not just the elite, if sustainable development is to be optimised.”

The Special Adviser to the Minister of State for Petroleum Resources on Gas Business Development, Branda Ataga equally expressed the need to domesticate gas development in the country.

Until that happens, Ataga noted that commodity may remain on the high side providing less benefits to the nation’s economy.

Currently, a kilogram of cooking gas, which traded for about N300 earlier this year now sells for over N500 across the country on the backdrop of vulnerable economic indexes, especially the continuous weakness of the naira and the increasing price of natural and refined gas at the international market.