Lagos — As clock ticks towards the December 2009 deadline promise to provide the nation 6,000mw electricity power supply, the Federal Government has been urged to make the country's refineries work to reduce heavy dependence on importation of petroleum products, in particular, Low Pour Fuel Oil (LPFO) and Automated Gas Oil (AGO).

In a statement made available to Daily Independent on Sunday, Manufacturers Association of Nigeria (MAN) said that from the period the concept of deregulation by the government was initiated to date, industrial consumers have witnessed at least four price bursts in LPFO.

The statement, which was signed by Felix Oba Okojie, Chairman MAN Gas users Group, read: "Manufacturers are not averse to the concept of deregulation, all we are saying is that gas should be detached from being benchmarked against Low Pour Fuel Oil (LPFO) as the constant fluctuations in the pricing will not be healthy for industrial Gas Users in terms of production, planning and costing."

The negative development in Nigeria, according to Okojie, would not only affect the direct users of LPFO, but also the users of gas as "the price of gas is benchmarked against Low Pour Fuel Oil (LPFO) prices, which as at today come to about N58.70 per scm."

Okojie continued: "There is no where in the world where gas is benchmarked against any petroleum product. We would like to remind the Federal Government that the supply situation of petroleum, particularly the Low Pour Fuel Oil (LPFO) is comatose, and given the sorry state of our public electricity supply, it will be unwise in our thinking to effect the implementation of deregulation at this point in time, particularly in the absence of dependable infrastructure without giving a special relief package to manufacturers with a view to cushioning the effects of the increase in the price of Low Pour Fuel Oil (LPFO) and Automated Gas Oil (AGO)."

According to the chairman, manufacturers, in the past one year, have been bedevilled with the problems of inordinate pricing mechanism, stressing that manufacturers are completely in the dark with regards to their cost structure arrangements for receiving supply of gas from their principal, the Nigerian Gas Company Limited (NGC). He said this accounts for why the end users are "extremely vulnerable and completely subjected to the whims and caprices of the gas suppliers".

The acute power shortage, which has crippled every sector of the nation's economy, in Okojie words, has also hampered the manufacturing industry. He said any further hike in gas price would add to "the woes of the sector and lead to reduction in capacity utilisation, more factory closure, job losses and possible relocation of companies to other countries".

As a palliative measure therefore, the association called on Federal Government to "implement a new gas price in the form of a subsidy similar to the electricity Multi Year Tariff System recently put in place in the power sector."

"Government through appropriate regulatory agencies should now fix the price of gas with due involvement of all the stakeholders. The new price of gas should have no link with Low Pour Fuel Oil (LPFO) as gas is a natural resource of the nation and much of it is being flared as waste. Government should give direct supply of Low Pour Fuel Oil (LPFO) at subsidised rate to bonafide manufacturers" Okojie said.