Labour rejects FG’s reduction of domestic gas prices for electricity generation to $2.18

THE Nigeria Labour Congress (NLC) on Thursday rejected the reduction of domestic gas prices for electricity generation to $2.18 per standard cubic feet (SCF) from $2.50, saying that the reduction “falls far below expectation.” 

Besides, the congress said the development was a flagrant repudiation of the kernel of the agreement between the Federal Government and Organised Labour, signed following the various meetings held late last year to resolve the crisis in both the oil and gas industry and the power/ electricity sector. In a statement signed by the NLC President, titled “Gas sale to GenCos should be below $1.50/SCF,” the congress also demanded that gas supply to GenCos should be made payable in Naira as against the dollar for domestic operations, and as agreed between the government and the organised labour. 

The Minister of State for Petroleum Resources, Timipre Sylva, announced at the 2021 gas stakeholders forum in Kano that the Federal Government had approved the reduction of domestic gas prices for electricity generation from $2.50 to $2.18 per SCF. 

But giving her position on the gas price reduction for GENCOs as announced by the Minister, the congress said “it is a flagrant repudiation of the kernel of the agreement between the Federal Government and Organised Labour, as it falls far below expectation.” 

Comrade Wabba said, “Congress reiterates the abundant evidence presented to the Technical Committee and the meeting of the Principals that the pricing of domestic gas for GenCos in US dollars represents the quintessence of underdevelopment of Nigeria’s energy sector. 

“Therefore, the dollarisation of domestic gas supply to local power generating companies similarly feeds neatly into the debate of the commodification of the indigenous resources to forcibly incorporate the developing countries into spawned dependency. 

“Hence, Congress rejected the denomination of domestic gas pricing to GenCos in foreign currency. Rather, congress insisted on a payment regime in naira not only for domestic gas but also, all energy associated products, which should be denominated in local currency.” 

Wabba explained that the government representatives, at the negotiating meetings were convinced by the argument of the congress and unanimously accepted that the current practice of gas pricing in US dollars would be discontinued to enable gas supply to GenCos to be made payable in Naira. 

The NLC President, therefore, said “From the foregoing, congress is increasingly hard put to repose confidence on the discussions and agreement at the meetings. The resolutions of the Principals cannot certainly be the basis for the minuscule gas price reduction announced by Minister Timipre Sylva. 

“Consequently, congress demands of the Federal Government to reduce the pricing of domestic gas supply to GenCos to less than $1.50 per SCF. “We also demand that payment for gas by GenCos should be denominated in Naira. Furthermore, the gas companies should be included in the Central Bank of Nigeria (CBN) and Nigerian Electricity Service Industry (NESI) payment waterfall to guarantee payments for gas and contract sanctity with GenCos. 

“Finally, Congress demands that the Federal Government should respect the agreement it reached with Labour on electricity tariff. Congress remains implacably committed to the ultimate reduction of electricity tariffs by N15 per kilowatt-hour by December 2021 as contained in the agreement. Congress hereby serves notice that the posture of the Federal Government to flout agreements is completely unacceptable and would be resisted.” 

 

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