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Stakeholders: Central Bank’s N250bn Gas Support Fund to Unlock 206TCF Reserves, Spur Growth
The N250 billion National Gas Expansion Programme (NGEP) being funded by the Central Bank of Nigeria (CBN) in collaboration with the Ministry of Petroleum Resources, has the capacity to unlock Nigeria’s 206 trillion standard cubic feet of gas reserves, some industry stakeholders have said.
In addition, it is expected to create about 2 million direct and indirect jobs annually by harnessing existing gas resources to spur other critical sectors of the economy, especially industrial activities, including petrochemicals.
According to the CBN, the fund will further support large industries enhance growth in agriculture, can be deployed for industrial applications as well as textile and help stimulate investment in the gas value chain.
Aside that, as a cleaner source of fuel, it will be of benefit to Nigeria’s poor and vulnerable, who are exposed to harmful carbon emissions through the use of archaic sources like firewood.
The African Refiners and Distribution Association (ARDA) had recently warn of imminent danger if Africa fails to quickly adopt modern clean cooking energy as over 600,000 Africans, mostly Nigerians may die yearly due to household air pollution like firewood and charcoal.
Currently, a kilogramme of cooking gas, which traded for about N300 earlier this year now sells for over N500 across the country, following continuous weakness of the naira and the increasing price of natural and refined gas at the international market.
While the current consumption of gas stands at about one million metric tonnes, the country has set a five million consumption target for 2021.
Speaking on the need to support local production, Executive Director, International Support Network for African Development (ISNAD-Africa), Adedoyin Adeleke, stated that if Nigeria continues to import over 70 per cent of gas product, especially LPG without domestication, boosting local utilisation at an affordable rate could be a mirage.
“The importation of Liquefied Petroleum Gas (LPG) inflates the cost of gas in the country making it unaffordable for most Nigerians. Coupled with the increasing cost of living in the country, increasing unemployment, unabated increase poverty rate.
“The vast majority of Nigerians will be pushed to resort to firewood for cooking hence increasing deforestation in the country, ”Adeleke said.
He added that there was need for the government to support the private sector for massive investment in gas production in Nigeria.
Adeleke noted that the exclusion of importation associated cost, economies of scale and participation of multiple players would catalyse competition which would crash the price of LPG in the country.
He added: “Local production for local consumption is the way. While it would be good to export, local consumption should be the priority. Farmers do not sell their seeds.
“Nigeria must not continue to sell out the seeds that could catalyse her much needed development, yet without undermining the sustainability of our environment and loss of biodiversity,” he stated.
In his contribution, an energy expert, Charles Majomi, noted that unless domesticated, gas prices would continue to increase.
“The market is likely to tighten further as uncertainty, around finance and investments in fossil fuels projects, brought about by the advance of renewables, is likely to cause a pull back in upstream production,” he noted.
According to him, the development will lead to firewood being the cheapest alternative, spurring mortality rate and increasing deforestation, which will have negative environmental impact in the rural areas.
A Petroleum Commerce Research Chair, University of Cape Coast Oil & Gas Studies, Prof. Wunmi Iledare, in his comments, lauded the intervention fund in the value chain.
He said: “Significant amount of investment is required to translate the reserves to usable form. Petroleum production is good for nothing, if its development does not improve the quality of life of the people, not just the elite, if sustainable development is to be optimised.”