Page 7 - AfrElec Week 42

AfrElec COMMENTARY AfrElec

as waste and burning it off. But Nigeria’s govern-
ment is now looking to eliminate flaring, partly all sectors of the economy, as well as residential
because it does not wish to discard potentially consumers. Likewise, gas-based industries will
useful resources and partly because it hopes to help maximise profits from gas production by
reduce emissions. As such, it has an incentive to turning out value-added products, while also
make gas development a more attractive invest- creating many new jobs.
ment target. If Abuja follows this course, though, it will be
performing a balancing act. It will have to uphold
Maintaining the incentive its new commitment to “establish a fully func-
Even so, maintaining this incentive will take tioning free market in natural gas for domestic
some effort. supplies,” as spelled out in the PIB, while also
As noted above, TPPs are slated to pay some- imposing some controls on prices in order to
what less for fuel than other consumers, while ensure the profitability of domestic sales.
gas-based industrial consumers may pay much Additionally, it will have to do these things
less. As a result, gas developers may show less while trying to make gas look economical
interest in sales to TPPs and gas-based indus- enough to attract the private investment that
tries – unless the government makes a point has typically gone to the oil sector. The PIB states
of managing demand through such measures that the NMDPRA must “monitor the gas prices
as mandating deliveries to such users and con- in other major emerging countries and ensure
structing transportation and distribution pipe- that Nigeria [continues] to have a price level for
lines according to schedules that prioritise such natural gas that is less than the average of these
users. emerging countries in order to promote the non-
There is an argument to be made in favour oil sectors in the Nigerian economy.”
of such measures. After all, TPPs will use gas This is likely to prove a complicated task. In
to produce electricity, thereby increasing the order to pull it off, Nigeria may have to work
domestic supply of a commodity that will benefit harder to ensure good governance. ™

Week 42 22•October•2020 www. NEWSBASE .com P7