Gas price increase’ll jerk electricity tariff

ERERA Power lines03 February 2014, Lagos – Electricity consumers may pay higher tariff if the Federal Government raises the price of domestic gas by 50 per cent, the President, Liquefied Natural Gas Association of Nigeria, Dapo Adeshina has said.

He said this may have ripple effects on stakeholders in the energy sector.

“The planned increase in the cost of gas would lead to a corresponding increase in the cost of tariff by the power distribution companies. The power generation companies would buy gas from the International Oil Companies (IOCs) at a higher price and in return pass the cost to the power generation firms.The firms would transfer the cost to the power distribution firms, which would further pass it to the consumers via increase in the tariff,’’ he said.

He said the development is going to benefit IOCs because it would increase their revenue greatly. “IOCs, such as Texaco, Chevron, Shell, and Exxon Mobil, as gas producers, will generate more revenues as a result of the gas price increase. Fifty per cent increase in gas price is not a small thing. However, we, as consumers, are going to bear the cost by paying higher tariffs,’’ he added.

However, he increse, he said, would boost more investments throrugh gas utilisation, arguing that the development would not affect the price of Liquefied Natural Gas (LNG) known as cooking gas.

“Natural gas and LPG are not the same thing. While the latter has more comprehensive functions and capacities, the former is not. So, there is no way the increase in natural gas price would affect the price of LPG,’’ he said.


– The Nation

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