Joseph Bakare
As thermal power plant faces gas supply constraints partly due to price hike, the
Managing Director of Niger Delta Power Holding Company (NDPHC) Limited, Chiedu Ugbo, says investment in new technology to make gas extraction cheaper has become necessary.
Ugbo, made the suggestion after raising concerns over gas price in the country.
While he sought for for re-evaluation of the price he blamed naira floating for the surge.
He recalled that the commodity was previously sold at N440/$, but floating of the naira has almost doubled exchange rate at the official window, while the price has increased threefold at the parallel market, even as the country’s gas reserve is put at 209 trillion standard cubic feet.
Ugbo said high cost of gas in Nigeria is worrisome, but investing in technology for extracting gas more cost-effectively could be a solution, as 80 per cent of Nigeria’s power plants are gas fired, a development which could make tariff adjustment or subsidies in the sector soar.
According to him, “May be, there has to be investment in technology that can bring out gas cheaper.”
A big question is: why is gas denominated in United States dollars? Before unification of exchange rates, we were buying gas at an official rate of around N440/$. But now that it is floated, are you going to pass the cost to consumers?”
He said renewables may be the future of energy. But as of now, Nigeria needs natural gas to power heavy industries. He said some industries, like those in the steel sector, cannot transit immediately to solar energy because they still need natural gas.