Although Nigeria’s President Muhammadu Buhari has expressed concern over the gas price hike in the country, his government has said that it has no control over the rising price of cooking gas especially as gas prices are determined by global market.
But the president has directed the Minister of State for Petroleum Resources, Timipre Sylva, to proceed to Nembe, Bayelsa State, to investigate the level of damage done by the recent oil spillage in the area.
The Minister of State for Petroleum Resources, Timipre Sylva, who disclosed this to State House correspondents at the Presidential Villa, Abuja, said he was at the State House to introduce to the President the CEO, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Engr. Faruk Ahmed, and the CEO, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Engr. Gbenga Komolafe.
Responding to questions from statehouse correspondents on what was responsible for the spike in the price of cooking gas and what government was doing to address the situation, Sylva said the government had no control over the price increase and could not subsidize the product because it was fully deregulated.
While stressing that gas prices were determined at the international market, the Minister said government was doing everything possible to bring down the price especially during the yuletide. He said: “We must understand that cooking gas is not subsidized. It is already a deregulated commodity, so the price of cooking gas is not determined by government or by everybody in the industry. In fact, gas prices are determined internationally.
“You all are aware that in Europe today, gas prices have gone up, there was even crisis in Europe relating to gas prices. So, the pricing of gas internationally now affects also the price of gas in the country. Apart from that, there are some issues around VAT charges on imported gas, and, of course, taxes on imported gas, which we are handling. But of course, quite frankly, these taxes on imported gas, you must also juxtapose it side by side with the local producers of gas.
“So if you incentivize the importance too much, then you will also kill the local industry. And also, you don’t want to incentivize the local industry at the expense of the imports, because if you incentivize the local industry at the expense of the imports, then you will not have enough gas produced within the country. So, these are the issues of balancing that the midstream and downstream regulatory authorities are handling and I want to assure you that we are quite concerned. Mr. President also is very concerned. He is aware that the price of gas is high in the market, and we’re doing everything to see how we can bring down the price of gas, especially as we approached the yuletide. On what the Federal Government was doing to minimize damage in Nembe, Bayelsa State, where there is oil spillage, he said President Buhari had directed that he should visit the community today to assess the situation.”
