Gas producers for Nigeria’s power sector lose N109.5 billion yearly to dollar-denominated transactions in the supply of 1.5 billion-2 billion cubic feet of gas per day (bcf) to the domestic market, THISDAY reports.
The gas producers have asked the Nigerian Bulk Electricity Trading Plc (NBET) to pay for gas supplied for power generation at the Nigerian Autonomous Foreign Exchange Rate (NAFEX) of N360 –N365 per dollar, which according to them, is the real market rate. It was gathered that while NBET pays the gas suppliers in naira at the exchange rate of N305 for the gas supplied to the generation companies, the gas investors pay N360-N365 to access dollars to embark on gas projects, which are largely denominated in dollars as against the naira.
Some of the gas producers stated that after being paid at the rate of N305 by NBET for gas supplied, they source dollars at the Nigerian Autonomous Foreign Exchange (NAFEX) rate of N360 –N365 to Execute Gas Projects, thus losing N60 in every dollar transaction. They noted that they are being shortchanged by being paid in naira, while they execute gas projects in dollars. The President of the Nigerian Gas Association and Chief Executive Officer of Frontier Oil Limited, Mr. Dada Thomas said that the CBN had in April 2017 promised to address the exchange rate disparity when the country’s external reserves hit $36 billion but nothing has been done till date.
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