More Increase In Electricity Tariff Looms, Says Adelabu

Mohammed Shosanya

The Federal Government has hinted that electricity tariff increase would be extended to all categories of customers in the country.

The announcement comes two days after the Nigerian Electricity Regulatory Commission (NERC) approved increase of electricity tariff for customers under the Band A classification.

At a briefing in Abuja on Friday, Minister of Power, Adebayo Adelabu,explained that the recent increase in electricity tariff is a pilot in stopping electricity subsidy in the country.

According to him,the government plans to remove all subsidies in the sector to allow the thriving of investment in the power sector.

He said: “This tariff review is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years. I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.”

“We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers.

“This is more like a pilot for us at the Ministry of Power and our agencies. It is like a proof of concept that those that have the infrastructure sufficient enough to deliver stable power of enjoying 20 hours of light to be the ones to get tariff add.”

He said that the N225 kilowatt per hour Band A customers are charged as little in relative to the N500 they pay for alternative energy like diesel and others.

Explaining that Nigeria is experiencing a subsidy pricing regime where the government provides a large portion of the generation, transmission and distribution cost, he said the government was formerly subsidising 67 percent of the cost of electricity.

He added:“The government would have paid N2.9tr for 2024. This is more than 10 percent of the national budget. It will be insensitive on our part to compel the government to pay such subsidy when we have other competing issues the government needs to fund under pau its of funds we have.”

Poor Nigerians Beneficit More From Electricity Tariff Hike-FG

Mohammed Shosanya

The recent increment in electricity tariff announced by the Federal Government is pro-poor,Alhaji Mohammed Idris, Minister of Information and National Orientation,has said.

He also said,it’s never the intension of federal government to aggravate the hardship currently faced by Nigerians.

According to him,the federal government is sustaining electricity subsidy to poor Nigerians by as much as 85%, noting that the recent adjusted tariff is targeted at 15% of the population comprising capable Nigerians willing to pay for it.

He noted that prior to the adjustment in tariff, the federal government was subsidizing electricity by as much is
N 2.9 trillion,almost the entire annual budget of the country.

In his opening remarks at the 4th Ministerial press briefing in Abuja on Friday,Mohammed Idris affirmed that the tarrif adjustment was geared to improve performance in the sector and encourage investment in the power sector, presently bugged by decaying infrastructure.

“A few days ago, the Federal Government unveiled a progressive policy in the power sector, which aims to boost sufficiency in power supply for all Nigerians. The most important aspect of the policy is that the Tinubu administration is sustaining electricity subsidy to 85% of Nigerian consumers, which re-justifies its credential as a Pro-People democratic government while effecting electricity tariff increment to only 15% of the electricity consumer population.

“Misconceptions and concerns around the tariff review are understandable. However, let me reassure every Nigerian that this review is a strategic step toward a more sustainable, efficient, and equitable electricity sector. It lays the groundwork for significant improvements in service delivery, infrastructure development, and economic prosperity. Our focus must therefore remain steadfast on ensuring that the electricity sector’s transformation benefits all Nigerians, supports our industries, and propels our nation towards its bright future”

He maintained that regular communication with Nigerians has so far succeeded in gradually restoring public trust in government, as he urged Nigerians to be patient with the government as it implements the renewed hope agenda.

“Since our last meeting with you, some salient achievements have taken place in our economy as we are all witnesses to the fact that through the implementation of some macroeconomic reforms, our foreign exchange market has stabilized and our beloved Naira is getting stronger daily.

“The recent establishment of the Presidential Economic Coordination Council and the Economic Management Team Emergency Task Force underscores Mr. President’s commitment to fostering a unified strategy for economic management that leverages the expertise and insights of key stakeholders from both the public and private sectors. These teams will serve as platforms for robust discussions, analysis, and decision-making to drive sustainable economic growth, job creation, and prosperity for all Nigerians”.

Abuse Of Tariff Order: Abuja DisCo Gets ₦200m Fine

Mohammed Shosanya

The Nigerian Electricity Regulatory Commission,has sanctioned the Abuja Electricity Distribution Plc (“AEDC”) for non-compliance with the Supplementary Order to the April 2024 Multi-Year Tariff Order 2024 for AEDC (the “Order”).

In a statement,the agency declared that AEDC has been fined ₦200,000,000 (Two Hundred Million Naira) for failure to comply with the prescribed customer band classifications for the tariff billing.

The decision follows a detailed review and customer feedback, which revealed that AEDC had applied the new tariff to all customer bands, contrary to the Order, which was designed to ensure fair billing practices,the agency said.

It added:AEDC is therefore mandated to: Reimburse all customers in Bands B, C, D and E respectively that were billed above the allowed customer categories/tariff bands provided in the Order.

“Reimburse through the provision of the balance of customer tokens that the affected customers would be entitled to receive at the applicable rates and all token reimbursements shall be issued to the affected customers by 11 April 2024.

“Pay the sum of ₦200,000,000.00 (Two Hundred Million Naira) as a fine for the flagrant breach of the Commission’s Order.

“File evidence of compliance with the directives in a & c with the Commission by 12 April 2024.

“The action by the Commission underscores its commitment to protecting consumer rights and ensuring equitable practices within Nigeria’s electricity sector”.

PETAN Promises Increased Support For Nigeria’s Oil,Gas Sector

Mohammed Shosanya

The Petroleum Technology Association of Nigeria (PETAN) has promised to support the efforts of the Bola Tinubu administration toward increasing Nigeria’s oil and gas production for maximum value.

The Chairman of PETAN, Mr. Wole Ogunsanya, expressed his association’s resolve in Lagos when the representatives of the Association of Energy Correspondents of Nigeria (NAEC) led by its Chairman, Mr. Ugo Amadi paid a courtesy and familiarisation visit to PETAN on Thursday.

He also assured NAEC of its commitment to consolidating the long-standing relationship existing between the two bodies.

He explained that the vision and intention of PETAN was to support the authorities to ensure that all the values existing in the oil industry stay in Nigeria.

According to him,if Nigeria could retain between 60 to 70 per cent of the oil and gas value chain in the country, the nation stood a better chance of emerging as top 20 economy in the world.

He expressed concerns that Nigeria is currently losing a lot due to its inability to produce up to its oil production capacity.

He disclosed that the country is under producing to the tune of at least 500,000 barrels per day, which he said was equivalent to $15 billion and hundreds of trillions of naira in excess of the national budget per year.

He said such loses would not have been if there was full in-country retention of values and beneficiation across all the chains of the industry.

He added: “Essentially, if Nigerian organisations are involved in taking that oil out, taking it to a refinery owned by Nigerians and refining it. If we have petrochemicals refining the gas and the product, we are taking that gas, we are processing it in power plants, we run pipelines to connect all those power plants, this country will be top 20 economy in the world.

“And we believe very strongly that there is no better prescription of Nigeria’s economic solution more than that.

“So,what we have, as we see today, the production is down by at least 500,000 barrels. That 500,000 barrels equates to $15 billion. If you do the maths at today’s rate, you are talking of hundreds of trillions of naira, more than what the national budget per year is.”

To retain those value in-country at every stage of oil and gas process, Wole said a lot of gaps needed to be filled through goverment policy initiatives and collaboration with industry stakeholders.

Reiterating PETAN’s commitment to support the retention of those values, he acknowledged the presidency’s highly interest in increasing production.

He pointed out that the presidency had given the directives and had formulated a lot of gazettes, stating that PETAN aligned with those initiatives.

He further said, “Our intention is to support this government, to support this country to increase production of oil and gas. I presented this vision to the whole house of PETAN exactly a week ago and the vision is very clear. PETAN wants to support Nigeria through innovative means to increase product of oil and gas in this country.

“That is the mandate that the president has given. PETAN is going to come with very innovative ideas on how this is going to be achieved and even low cost approach that is being used in other countries. If you go to Indonesia where some of us have relationships, this is what they are doing. They are looking inwards on how to maximize returns from the resources that they have.”

Owing to the technical know-how of the members and the unique position of the association, the PETAN boss said they are working with the government to create value for the country.

He said the group’s commitment and response to the president’s mandate of increasing production was for them to be prepared to deploy all their assets at various locations in the Niger Delta to actualise that mandate.

He acknowledged the challenges facing the industry in Nigeria including funding, logistics and others.

He emphasized the import of collaboration and partnership between PETAN and other critical stakeholders.

He maintained that his association cannot make progress with some of its plans without collaborating with either energy correspondents.

He added, “We cannot do without you. Our message cannot resonate and cannot get across without your partnership with us. So, let me assure you that what has happened in the past due to the circumstances of COVID that could have allowed some things to be put on the hold will not happen again.

“Essentially, we both need each other. PETAN needs you to tell that story, to sell what PETAN vision is in order to help the situation we find ourselves. And I appreciate your candour in terms of how we’ve supported each other. We are going to support you as PETAN as we have done in the past.

“So, Mr. Chairman, I give you that assurance. We would work with you immediately.”

Metering Will Boost Investment In Power Sector-Olatunbosun

Mohammed Shosanya

The Chief Executive Officer, De-Haryor Global Services Limited, Engr. Ashade Olatunbosun,has said that increased metering of households, businesses and other customers would enhance investment and growth in Nigeria’s power sector.

In a statement made available to Premium News in Lagos, Engr. Olatunbosun,said increased metering will continue to enhance quality service delivery, and revenue collection while encouraging investors to invest more resources toward growing the sector from one level to another.

His company, which was established in 2009,has been an active player since 2016, providing quality products and services to customers, adding that its smart meters cannot be tampered with or altered in any way.

According to him,the company has been duly certified by relevant government institutions, including the Nigerian Electricity Management Services Agency, NEMSA, and the Nigerian Electricity Regulatory Commission, NERC, to do business in Nigeria.

Commending President Bola Tinubu administration for efforts made to further enhance metering in the sector,he said: “It is a good initiative and it is going to impact the sector positively. If the right meters are put in place, it will make it difficult for end users to bypass them, thus enabling the Electricity Distribution Companies, DISCOs to monitor their payments and recoup their investments.”

Speaking on the quality of his products and services,he said: “I am an engineer and our meters are smart in every sense of the word. Our meters cannot be manipulated. The only way customers can have access to energy is via our dedicated mobile app, making it very efficient and reliable.

“Our company is a servicing Electrical and Construction Company, providing complete Electrical and Building Services to commercial and industrial customers in Nigeria. We are not a new company. Contrary to speculation, we have been in existence since 2009 and started metering operations in 2016.

“The narrative, which gives the impression that we are a new organization, is completely false and misleading. But we are not distracted as we are focused on ensuring that we provide very high quality products and services, targeted at positively impacting consumers, the power sector and Nigeria’s economy.”

He also noted that, “Our client, the Nigerian army has her internal procurement procedures. In awarding its metering contract, due processes were followed. Also, several companies were contacted, before they were reduced to a few.

“There are different categories of certificates and businesses in the metering sector. The license we have currently permits us to import meters. We did not wait for the government to introduce us to the Nigerian Army. We made the move. We import and install very high quality meters to customers.”

Engr. Olatunbosun,who stressed the need for training, capacity building and acquisition of modern technologies, said: “I was trained by the British and I have adopted that method of training in our organization. Our staff are people we hired and trained. Training and capacity building in all departments is key. We have been doing it for many years and will continue to do so in the future. We pay maximum attention to human capital development because it is very important.

“We also believe in local content. We have people benefiting from our operations because we source some of our materials from Nigeria. We shall continue to promote local content in our operations because it will impact positively on persons, organisations, the power sector and nation’s economy.”

He implored the government to provide a level playing field to enable all operators to do business in the metering sector,adding that, the company is currently working towards establishing an assembling plant in the nation, targeted at further maximizing its contributions to the power sector and Nigeria’s economy.

Nigeria’s Gas Investment Policies Will  Ignite Sustainable Energy Future, Says NGA

Mohammed Shosanya

The Nigerian Gas Association (NGA),has commended the Federal Government for the recent gazetting of three pivotal policy directives, heralding a monumental leap towards unlocking investments in the oil and gas sector.

These directives encompass multifaceted strategies, including introducing fiscal incentives for non-associated gas, midstream, and deepwater developments, streamlining the contracting process to compress the contracting cycle to six months, and applying local content requirements without hindering investments or cost competitiveness.

Mr. Aka Nwokedi, President of the Nigerian Gas Association,in a statement,lauded these directives as transformative milestones poised to revolutionise Nigeria’s oil and gas sector energy landscape, with gas as a critical enabler.

He emphasised that the strategic introduction of fiscal incentives for non-associated gas, midstream, and deepwater developments is poised to attract substantial investments, bolster security measures, escalate production rates activities, amplify domestic gas utilisation, and refine the ease of doing business within the sector.

Besides,streamlining the contracting process to expedite the current 36-month contracting cycle to just six months is hailed as a game-changer. This would significantly reduce bureaucratic bottlenecks and enhance operational efficiency across the sector.

This streamlined approach will catalyse project execution, optimise resource allocation, and foster a conducive environment for local and international investors.

Moreover, applying local content requirements without compromising investments or cost competitiveness underscores the government’s commitment to fostering sustainable development and empowering local stakeholders.

These directives could pave the way for inclusive growth, knowledge transfer, and skill development within the Nigerian workforce by balancing local content obligations and investment incentives.

“We commend the Federal Government for its unwavering commitment to driving positive change and fostering a conducive environment for investment in the oil and gas sector,” stated Mr. Nwokedi. “These progressive policy directives mark a significant leap forward in our collective journey towards a sustainable energy future and bolstering security across Nigeria.”

Mr. Nwokedi reiterated the NGA’s steadfast commitment to collaborating with the Federal Government to actualise the nation’s strategic energy objectives, focusing on leveraging gas as a pivotal enabler of economic prosperity and national development.

The Nigerian Gas Association reaffirms its dedication to fostering collaboration with all stakeholders, including government agencies, industry players, and civil society organisations, to propel progress and prosperity in the oil and gas sector.