Textile manufacturers in the country have appealed to the Federal Government to stop selling gas to local industries in dollars.
According to them, the payment of the gas tariff in the United States dollar is counter-productive to local manufacturers, a development that has made the commodity unaffordable to many businesses.
Speaking under the aegis of the Nigerian Textile Manufacturers Association, operators in the sector stressed that the gas being supplied to the local industries was costlier than what the commodity was selling for in the international market.
The Director-General, NTMA, Mr. Hamma Kwajaffa, who made the group’s position known in a presentation that was made available to our correspondent in Abuja on Wednesday, said, “The price of gas supplied to the local industry is pegged to the American dollar and was not reviewed after the drop in global oil and gas prices.
“The current domestic tariff at $7.38/mmscf is three times the price of gas in the international market. There is a need to review the tariff on gas supplied to the industries in naira, which should be affordable.”
The Federal Ministry of Petroleum Resources and the Ministry of Power, Works and Housing on several occasions had made it clear that the cost of gas to the power plants was lower than what industrial gas users were paying.
Both ministries also stated that gas was an international commodity and, hence, it was being priced in the US dollar.
Kwajaffa, however, stated that despite the government’s pledge to revive the textile sector, the reality on ground was worrisome.
He said the prevailing harsh environment had no doubt dealt a serious blow to the already fragile sector, adding that Nigeria was currently spending over $4bn annually to import textiles and ready-made clothing.
“Our country has the potential to produce for the local market, export to the ECOWAS market of 175 million people, and to the developed world, but smuggled goods continue to flood major textile markets in Kantin Kwari, Kano, Balogun and Oshodi in Lagos,” he stated.
Kwajaffa noted that a number of recommendations on how to revive the sector had been made available to the government, adding that urgent steps must be taken to save the industry from collapse.
He said, “Scarcity of black oil has crippled the operations of the textile mills in the North. There is a need to ensure availability of the fuel to the textile mills by way of direct allocation from the Kaduna and other refineries. Consistent supply of certified seeds is required to ensure adequate supply of cotton to the local textile industry
“Under the dual exchange rate policy being currently pursued, the CBN should allocate forex at the official rate to textile manufacturers for meeting the need for import of essential raw materials by the textile mills. The need for import substitution has never been felt stronger before. The government should persuade its MDAs to source all their uniforms from the local textile mills.
“The scheme for the supply of free meals to schoolchildren should be extended to free uniforms to be procured by the government from local textile mills. Government should check the influx of smuggled goods and take action against counterfeit textiles, which fake the Nigerian trademarks.”