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Manufacturers groan under shortage of gas supply

by Business News Report
Operators in the manufacturing and power sectors are currently groaning under the severe gas shortage and its impact on their production.
A major cement manufacturer at the weekend hinted that the twin problems of pipeline vandalisation and the maintenance work on some Chevron gas installations taking place at the same time is responsible for the disruption of gas supply to the cement plants and other manufacturing outfits in the country.
The Nigerian National Petroleum Corporation (NNPC) had in the wake of the gas supply disruption attributed the development to pipeline vandalism. The NNPC GMD, Andrew Yakubu had lamented that about N800 million had been spent on the fixing of the damaged pipelines and blamed it on alleged outright sabotage of some crucial pipelines which he said had significantly eroded available gas supply to the power plants leading to incessant blackout.
The shortage of gas supply has also impacted negatively on the electricity supply in the country. Mr Doyin Salami, an economist and member of Faculty at the Lagos Business School was quoted to have said at a Rand Merchant Bank Executive discussion that ‘’it may take three to five years to get sustainable power supply in Nigeria.
To avoid the unpleasant situation, most Nigerians have resorted to generating own electricity themselves using diesel or petrol powered generating sets. This was attested to by the Global Business Intelligence, a research firm which estimated that Nigerians spent about N70.5 billion on electricity generation in 2011.
Cement manufacturers revealed that, although they are trying to make up with LPFO supplies from local refineries, the local supplies are not enough to make up for the deficit and they are now resorting to importing LPFO and coal.
A top official of Dangote Cement, the largest producer, who pleaded anonymity said: “Yes, we are having problems with gas supply to our plants and it is partially affecting our operations. As soon as the gas supply is restored, cement production will be back at full capacity and supply to the market will stabilise. In our plants for instance across the country, in the absence of gas, we consume up to 3.75 million litres of LPFO daily, which translates to an additional N0.5 billion per day increase in our production cost.
In the last two years, Local manufacturers of cement have ramped up their capacities and have been producing enough cement to meet and surpass cement demand in the country. They have made the country not only self-sufficient in cement production but also a net exporter.

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