A Review of the Nigerian Energy Industry

Manufacturers lose N22b to Shell gas cut

Shell facility17 November 2014, Lagos – The cut in gas supply to no fewer than 87 manufacturing companies in the Agbara and Ota industrial belts of Lagos and Ogun states has cost manufacturers about N22b in the past three weeks, manufacturers, whose businesses have been affected, have cried out.

Four manufacturers, who called our correspondent to complain of the problem, lamented that their businesses had witnessed the worst setback since the incident, which they blamed on the Shell Petroleum Development Company, SPDC, that supplies the two areas with gas.

But the major twist to the ugly development is that whereas one of the manufacturers, an indigenous outfit lamented that its firm, a large scale food processing plant had lost an average of N300m in the first week of the problem, the Nigeria Gas Company, NGC, that regulates industrial gas consumption and supply, claimed ignorance of the development.

But another officer of NGC at the Lagos office accepted that unofficially, the regulating company was aware but Shell does not want the matter to become a public issue as it did not formally inform NGC of the problem.

The official said that the NGC had no problems with gas supply to Shell and wondered why the problem had not been sorted out before now.

One of the manufacturers said on Tuesday, October 28, Shell sent emergency emails to the manufacturers declaring Force Majeur on supply, implying there is unforeseen development that would disrupt supply. The excuse they gave for the development was pipeline vandalism. But they didn’t give a date for the return of gas.

“Last Monday and Tuesday, we had some pressure in the line, but there was no supply. But after that initial mail, Shell has not replied all our subsequent inquiries on the return of supply.

It has always been evading the question and promising to get back to us without any action. While few manufacturers, especially the multinationals have sought alternative source of power for their production, most of us that have no alternatives have been totally out of business these two weeks.
*Soni Daniel – Vanguard

In this article

Join the Conversation