9 November 2009
Abuja — Over 150 manufacturing companies in Lagos will today stop production because gas supply to their factories has been suspended by the Gaslink Limited, the Director-General of the Manufacturers Association of Nigeria has said.
Jide Mike said at the weekend in Lagos that production has already stopped in all manufacturing companies in Iganmu Industrial Estate, Lagos.
Among the major industries affected by the suspension of gas supply include the Nigerian Breweries Plc, Nigerian Bag Manufacturing Limited (BAGCO) and Sunflag Nigerian Limited.
Analysts say the stoppage of production by these companies could cost the country several billions of naira with attendant job loss.
Mike said the gas supply company took the action as a first step of its implementation notice to cut off more than 150 industrial users of gas in Lagos State.
He said the suspension of gas supply is in anticipation of the expected deregulation of the downstream sector of the petroleum industry.
Gaslink in a statement dismissed the claim of the manufacturers as sensational, saying it has only disconnected defaulting customers from its gas grid. The company said the development is an ongoing exercise. It said the affected customers were disconnected after the expiration of the contractual 30 days credit period and a subsequent 30 days of grace.
It also said that the claim to the disconnection of 150 industrial customers is not true because less than 100 industrial customers are connected to its gas grid.
The statement read: "Gaslink is a responsible corporate citizen showing unparalleled commitment to the industrialisation of Nigeria. To date, we have invested over $225 million to provide the much required infrastructure to aid the manufacturing industry.
"No other gas distribution company in the country has been able to match the level of our investment so far. The 100 km of gas grid we have built in Lagos has made it possible for industry to run their operations on gas, which remain the cheapest energy fuel available."
MAN is accusing Gaslink Limited of hiking the price of gas, which is making life unbearable for its members.
MAN DG said they have deliberated on the crisis that would accompany deregulation in the oil sector and have resolved to convey their fear to President Yar'Adua in order to elicit urgent action by the government. "In a recent development, the government has approved that price of gas supply to the cement industry should no longer be benchmarked against the price of LPFO. Manufacturers believe that the concession should applicable to all manufacturers", President of MAN Alhaji Bashir Borodo has said.
He said between May and July, the price of Low Pour Fuel Oil increased three times from N25.40 to N48.00, N45.00 to N57.00 and later to N64.00.
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