Nigeria’s electricity pricing conundrum would remain a tricky issue in 2025,the Centre for the Promotion of Private Enterprise has said.
The Centre attributes the development to the fact that the nation’s economy is too fragile to absorb the shocks of a fully deregulated or commercial electricity market.
Its Chief Executive Officer,Dr.Muda Yusuf,in a statement said the quality of the transmission infrastructures and the consequent frequent collapse of the transmission grid require significant investment which the government would have to struggle to provide.
He added:”The outlook for the sector remains a major cause for worry in 2025.There are also the transition challenges of the states taking up regulatory responsibilities for electricity market. Not many states have the capacity to manage this transition. This is therefore a major source of risk for the electricity sector in 2025”.
According to him,the outlook for the Nigeria energy sector is moderately positive,especially following the increased capacity in domestic refining of petroleum products.
He added that this will require supportive fiscal and monetary policy support to unlock the full potentials of the domestic refineries and stimulate more investments in the sector.
He said factors that may drive the positive outlook for the sector include enhanced domestic petroleum refining capacity from the Dangote refineries, the Port Harcourt Refineries and others,as well as emerging competition among domestic refineries which may have a moderating effect on prices.
He also said expectation of a slump in global energy prices on the back of Trump presidency and the easing of geopolitical challenges in the 2025 will also determine positive outcome for the nation’s energy sector.
He added that the sector’s performance in the new year will be determined by the sustenance of the naira for crude arrangement which could help moderate prices of domestic refining of crude.