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FG To Increase Subsidy Payment To Power Sector As It Increases Gas Prices

FG just used its hand to hike its (unpaid) ‘subsidy ticket’, it was already battling FX floating policy impact and now just decided to increase the price of Gas.

 Olushola Bello

The Federal Government is increasing the amount of subsidy it is paying the power sector value chain because it plans to increase the gas price.

The same government that is saying it does want to increase electricity tariff now has found it convenient to increase the gas price thereby increasing the cost of generating I kilowatt-hour of electricity. By implication, it means that the government would anytime soon increase the electricity tariff it has been trying to avoid.

Nigeria Midstream and Downstream Product Regulatory Authority (NMDPRA) on Monday announced new prices for Gas. It’s $2.42/MMBtu from $2.18 and the price of gas for commercial users is $2.92mmbtu from $2.50mmbtu.

Some  industry stakeholders simply described this development as “FG just used its hand to hike its (unpaid) ‘subsidy ticket’, it was already battling FX floating policy impact and now just decided to increase the price of Gas.”

According to NMDPRA, the price of gas is now $2.42mmbtu while the price for commercial users is now $2.92mmbtu

Accordingly, after due consultations with key stakeholders and taking into full cognizance the provisions of the Petroleum Industry Act, (PIA), as well as the gazette gas pricing and domestic demand regulations. The NMDPRA hereby establishes the year 2024 domestic gas-based price as USD 2.42mmbtu and wholesale prices of natural gas.

businessstandardsng.com/a strategic cross-reporting initiative.

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