The Nigerian power ministry has been putting into consideration legislative measures to allow for the payment of gas to be made in naira.
There was an official statement from the Nigeria Minister of Power on his X account (formerly known as Twitter) after a meeting between him and the Minister of State for Petroleum Resources (Gas).
Their meeting agenda was to discuss the low supply of gas to the companies generating electricity.
The Minister of Power mentioned that the payment of natural gas in naira can solve the problem of the low supply of gas to the companies generating electricity.
He stated, “Proposing domestic gas payment in naira is a key step toward stability, aligning with our economy’s needs and promoting sustainable energy production. Payment shortfalls within the electricity sector pose risks to production and the entire value chain.”
“Leveraging my financial sector experience and contacts, I’m working with stakeholders to advocate for legislative measures mandating naira-denominated payments for domestic gas supply.”
However, the minister of power also made mention of another serious issue facing the power sector, which is the vandalism of gas infrastructures.
Referencing a report in 2021 by NEITI, it was found that there were about 7,143 incidents of pipeline breakages across the country.
Moreover, the minister emphasized that to make sure for a balanced supply of gas to the companies generating electricity, the gas suppliers and GENCOs would be in concise contractual agreements.
Further information:
The construction of gas plants and pipelines which are in dollars, gave rise to the natural gas being priced in dollars.
However, due to the current depreciation of the Nigerian currency to the Dollar, it has been difficult for the local operators to make payments in dollars.
Moreover, this currency issue gave rise to the skyrocketing price of gas across the country’s domestic market.
