The Niger Delta Power Holding Company (NDPHC) has called for a reconsideration of the current practice of pricing domestically produced natural gas in foreign currency.
The NDPHC expressed its concern over the sale of domestic gas in dollars, emphasizing the need for a change in this approach. Chiedu Ugbo, the Managing Director of NDPHC, made these remarks at the 2023 Nigeria Energy Summit, citing the recent unification of exchange rates as a factor that has led to an increase in the cost of gas used for power generation.
Ugbo argued that it would be beneficial to reduce the cost of gas for domestic consumption and stressed that gas should not be denominated in US dollars, exposing it to fluctuations in the foreign exchange market.
He highlighted the critical role of gas in powering electricity plants and noted the reluctance of international oil companies (IOCs) to allocate gas for domestic use due to concerns about the liquidity of the domestic market.
In response to this challenge, Ugbo called for collaboration between the gas regulator and the electricity regulator to find a solution that would harmonize the interests of both sectors. This collaboration, he believes, is essential to ensuring a stable and cost-effective supply of gas for domestic consumption.
