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Manufacturers lose N22bn through Shell Gas Cut

By on November 13, 2014

The cut in gas supply to about 87 manufacturing companies in the Agbara and Ota industrial belts of Lagos and Ogun States has cost manufacturers about N22 billion in the past 16 days of the crisis.

Four manufacturers that called to complain of the problem lamented that their businesses had witnessed the worst crisis since the incident which they blame on the Shell Petroleum Development Company (SPDC) that supplies the two areas gas for their plants.

But the major twist to the ugly development is that whereas one of the manufacturers, an indigenous outfit, lamented that its firm, a large-scale food processing plant, had lost an average of N300 million in the first week of the problem, the Nigeria Gas Company (NGC) that regulates industrial gas consumption and supply said it is not aware of it.

Efforts made to reach the NGC office in Abuja, a very senior management official who said he was not the one to speak to the press on the matter, noted that he was sure the office had not been informed by Shell of the shortage.

With companies that had lost more than this figure, the manufacturers placed the extent of loss at about N22 billion.

But another officer of NGC at the Lagos office accepted that unofficially, the regulating company was aware but Shell does not want the matter to be a public issue as it did not formally inform NGC of the problem.

He promised that NGC had no problems with gas supply to Shell and wondered why the problem would last that long without solution.

He said some officials of NGC after getting several calls, contacted Shell on the development and were told that the problem arose from what it called clamping, which the NGC official said was minor and should not last that long to rectify.

One of the manufacturers said on October 28 that Shell sent emergency e-mails to the manufacturers, declaring force majeur on supply, implying there is unforeseen development that would disrupt supply.

The excuse they gave for the development was pipeline vandalism. But they didn’t give a date for the return of gas.

“Last Monday and Tuesday, we had some pressure in the line, but no supply actually. But after that initial mail, Shell has not replied all our subsequent inquiries on the return of supply. It has always been evading the question and promising to get back to us without any action.

“While few manufacturers, especially the multinationals have fallen back to their alternative supply through diesel tankers, most of us that have no alternative have been totally out of business these two weeks. And we need immediate intervention to save the situation and the economy from total collapse,” a manufacturer said.
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We also found that even the Manufacturers Association of Nigeria (MAN) has contacted Shell over the issue and there has been no clear answer on how long the problem would take to be rectified.

When some of the manufactures in the affected areas made contacts with the Shell in Lagos, the office was reported, as one of them noted, to have said that the problem is a minor one involving a faulty process called clamp, and is not something that would take time to correct.

In their complaint, the manufacturers that spoke with us said they called NGC to update them on the said fault, and NGC noted that if the problem is clamp, it would not take more than 48 hours to fix.

“But our surprise is that while NGC says it is not formally aware of the problem, Shell has been giving us the impression that NGC caused the shortage by stopping gas supply to them after the vandalism. Right now, we are not even sure of where to trace the problem to or how or when it would be solved. We are sick of complaining to and asking Shell questions that don’t get answers. And from the way it manages the information, we suspect something is fishy about the shortage. We therefore want the management of the NGC to investigate why Shell would bring the economy to a total stop even when we pay for the service they have refused rendering us in two weeks.

We have incurred heavy and untold losses, and don’t even know when the end would be,” the manufacturer that spoke for the affected firms lamented.

 

[ThisDay]