The Minister of State for Petroleum Resources, Chief Timipre Sylva, has inaugurated a committee to review the price of natural gas with a view to ending the age-long disparity between domestic and export gas prices.
Speaking at the inauguration ceremony, the Minister who disclosed that 30 June, 2020, has been scheduled for the official flag-off of construction work on the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project by President Muhammadu Buhari, said Government was committed to streamlining the gas sector as a catalyst to drive the nation’s economic development. “A significant element of the Federal Government’s economic development plan was to move Nigeria from being crude oil export-based economy to an attractive oil and gas based industry economy. This is in realization of the availability and great potential of gas to drive economic development”, he said.
He charged members of the committee to review the existing domestic gas pricing structure and benchmark it with the global pricing mechanism, stressing that the current situation where the price of gas in the domestic market was higher than export price was not sustainable.
He listed the committee’s terms of reference to include: Reviewing the existing domestic gas pricing structure in such a manner that will attract investment in the domestic gas market as well as ensuring viability of the entire gas value chain and making recommendations on appropriate gas price for the respective segments of the gas value chain.
Other terms of reference include: Reviewing the National Gas Policy and advising on related issues and concerns with regards to gas pricing and downstream gas sector development and evaluating current government initiatives on gas pricing with a view to linking domestic gas pricing with the LNG export parity price.
The Minister charged the committee to submit its report within 30 days. In his remarks, Kyari, said that right pricing was an important factor in the entire process of restructuring the sector in order to attract investments.