The Vice President, Professor Yemi Osinbajo has disclosed that the electricity tariff reforms and its services-based tariff have soared collections by 63 per cent.
The Vice President, who was ably represented by the Special Adviser to President Muhammadu Buhari on Infrastructure, Mr. Ahmad Rufai Zakari this has increased revenue assurance for gas producers and stabilised the value chain.
This expectation will facilitate accruable revenue, which he said, would reduce the subsidies as reforms in metering and efficiency in the distribution companies get better.
Osinbajo made this revelation at the 14th Annual Conference of the Nigerian Association of Energy Economists (NAEE), themed: “Strategic responses of the energy sector to COVID-19 impacts on African economies.”
According to him, “Electricity Tariff Reforms with the Service Based Tariff that have increased collections from the electricity sector by 63 per cent, increasing revenue assurance for gas producers and stabilising the value chain. it is anticipated that all electricity market revenue will be obtained from the market with limited subsidies as reforms in metering and efficiency with the DisCos continue to improve.”
Osinbajo revealed that there had been an accelerated investment in transmission and distribution that would put Nigeria on a path to 10GW+ (over 10,000MW) and beyond.
He said this would become realizable through interventions with the Central Bank of Nigeria, the Siemens partnership, the World Bank and African Development Bank, JICA, AFD and others.
Osinbajo said, “As we stabilise our electricity sector, we need more electricity for our large population, that is why this administration continues to invest in expanding generation to cater for our current and future needs … the Okpai ph II plant, the Afam III fast power plant, the Zungeru Hydro plant and the Kashimbilla Hydro plant will add more than 1000MW of capacity in both gas and renewable segments.
“This administration has transformed the Rural Electrification Agency into a renewable energy driven organisation with Solar power at its heart, the 5 million Solar Connections Program – Solar Power Naija aims to electrify 25 million citizens through private sector and public private partnerships and is the largest off-grid connections program in Africa.”
He also noted that the administration led by President Muhammadu Buhari has put a keen focus on Nigeria’s energy sector.
Significant, transformational initiatives, said Osinbajo, have been embarked on or concluded that will leave an indelible mark on the economics of energy in Nigeria for the future.
He further emphasised some of the key initiatives including NLNG Train 7, FID project, which he said, would lead to an increased capacity of up to 30 per cent at Bonny Island and keep Nigeria at the forefront of leaders in Liquified Natural Gas globally.
He also noted that there is also the completion of the OB3 line in 2021.
According to him, “These initiatives are key determinant of the Decade of Gas that President Muhammadu Buhari declared.
“As the sixth largest gas country and ninth in gas export, Nigeria needs to consume more gas to energise Nigeria’s economy.”
Osinbajo emphasised the administration’s commitment to pass and sign into law the PIB which will drive improved clarity and enhanced economic opportunity deriving from the country’s Petroleum Industry.
He said that advanced progress in the Dangote Refinery as well as the launch of the Port Harcourt Refinery project that will position the country for self-sustainability in refined products.
He noted that “from some of the above policy directions, the administration is putting Nigeria on a path to do both … it will be interesting to hear the outcomes of the deliberations in this conference in regards to ideas and thinking on how we can maintain this balance.”
He thereby charged the conference on “How do we ensure that Gas is viewed globally as a transitional energy source and we keep global funding for gas projects?
“How do we create a balance between our gas power and renewable power supplies, what type of grid of the future do we need to maintain this balance?
“How can we obtain self sufficiency in LPG and Cooking Gas in the next 3 to 5 years? Elimination of firewood and kerosene stoves will help reduce accidents and improve the climate
“How do we view the transition in vehicles energy, how should Nigeria position with increased electric vehicles, gas vehicles and a decline in internal combustion engines (ICE).”
On his part, the NAEE President, Yinka Omorogbe charged Nigerians to conclude its deliberations on the Petroleum Industry Bill (PIB).
“We cannot be the country that remains frozen in debilitating discussions on whether or not a Bill that will provide a new legal framework for the petroleum industry must pass or not because of controversial clauses that can be amended,” Omoregbe said.
He said as the nation debates the Bill, it is necessary to focus on its actual contents and not on interpretations that are not always supported by fact. It is important for those who can, to come out with actual numbers and eschew the present discussions on percentages, based on the perception that they refer to the same thing when they do not.
According to him, there are so many questions which need to be dealt with in any serious discussions on the PIB.
However, Omorogbe said “All discussions must be premised against the knowledge that we must commence our reform as soon as possible.
“We do not have the option of no reform unless we want greater regression in our development indicators and increasing numbers of Nigerians sinking into extreme poverty.”