Thursday, 4 June 2015

Impending Danger: Oando Orders Nigeria's FG to Increase Fuel-Pump Price

Image result for pictures of md of oando gas and power ltd 
The federal government needs to increase natural gas prices for power plants further to help encourage more gas exploration and production to plug persistent power shortages, the chief executive of Oando Gas & Power, Bolaji Osunsanya, has said.

Nigeria has the ninth largest proven gas reserves in the world at 187 trillion cubic feet (tcf), but exports around 35 percent of its gas production, loses 48 percent to flaring and reinjection and consumes just 15 percent domestically.
However, its domestic gas demand is expected to rise to over 10 billion cubic feet (bcf) a day by 2020 from around 2 bcf/day now, and around $55 billion of investment is needed in exploration activities, new processing facilities, pipelines and transmission and distribution networks.
To help encourage increased production by companies, the government had increased the price of gas to power last December to $2.50 /million cubic feet (mcf) from about $0.50 but Osunsanya who is also president of the Nigerian Gas Association, maintained this isn’t enough.
“We don’t see a big rush (of activity) even at $2.50. People argue anything upwards of the $3 mark would probably start to incentivise exploration and production. On a netback basis, they argue it should be close to $4 or $4.50,” he told Reuters at a briefing in London.
Osunsanya hopes the new administration will speed up measures to bridge the supply gap, focusing on funding, infrastructure and pricing.



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