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Senate urges FG to stop planned increase in electricity tariff via subsidy withdrawal

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The Senate has urged the Federal Government to stop its planned increase of electricity tariff via the planned withdrawal of electricity subsidy.

The upper legislative chamber made the call through a motion it adopted at plenary on Wednesday in Abuja.

The motion was captioned, “Planned Increase in Electricity Tariff and Arbitrary Billing of Unmetered Customers by Distribution Companies (DisCos)” and brought under matters of urgent public importance, sponsored by Sen. Aminu Abbas (PDP Adamawa) and 10 co-sponsors.

Abbas said it was worrisome to hear of the plan to increase electricity tariff by the relevant statutory authority in spite of increased economic challenges with attendant widespread poverty and high cost of living in Nigeria.

He claimed that the Minister of Power was reported to have said that “The nation must begin to move towards a cost-effective tariff model, as the country was currently indebted with N1.3  trillion to Generating Companies (GenCos) and $1.3 billion owed to gas companies.”

According to Abass, the minister had said that more than N2 trillion was needed for subsidy, but only N450 billion was budgeted in 2024.

“The Senate may further note that the same electricity businesses are collecting money from customers for services not rendered.

“When they have not added anything to the equipment, they inherited it from Power Holding Company of Nigeria.

“Communities buy transformers to replace damaged ones in addition to over-burden bills and arbitrary estimates for unmetered customers.

“This is taking place in a country where the greater number of the population is living below the poverty level, with stagnant wages.

“Rising inflation and depreciating currency, the prospect of higher electricity bill is unattainable,” Abbas said.

He said that arbitrary energy charges on unmetered customers had become worrisome given Feb. 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on non-compliance with energy billing caps by DisCos and penalty of N10.5 billion imposed on DisCos that over-billed its unmetered customers.

Abbas said in 2020 the President of Nigeria then, ordered NERC to commence mass pre-paid metering to end estimated billing, saying that funds were released to that effect.

He said it was worrisome that the multiple sanctions declared to be imposed by NERC against DisCos for failing to comply with eradication of estimated billing for unmetered customers which included credit adjustments to over-billed unmetered customers for the period Jan– Sept, 2023.

He said March 2024 billing cycle, publication of the list of credit adjustment beneficiaries in two national dailies, indicates a deduction of N10.5 billion from annual allowed revenues of the eleven DisCos during the next tariff review.

This, he said, seemed to have been in futility, given the continued violations by DISCOs.

He expressed reservation that in addition to the high cost of living being experienced in the country, the unmetered customers who are owners of small and medium enterprises were adversely impacted by the level of exorbitant electricity charges and by implication have their businesses affected.

The Senate in its further resolution mandated the Committee on Power to investigate the over N2 trillion subsidy requirements as stated by the Minister of Power to avoid the repeat of the fuel subsidy scenario.

It also mandated the committee to investigate the statement made by the minister with regards to the N1.3 trillion the ministry was said to owe the GenCos and N1.3 billion dollars owed to gas companies.

It also urged the committee to investigate the role of the Ministry of Power, NERC and Ziglaks Company on their roles in the failed agreement to provide prepaid meters and ensure Nigeria is not shortchanged.

It also urged the committee to engage the NERC to come up with a lasting solution to the energy billing system in the country and other related issues.

The senate urged the committee to find out the truth of the matter on issue of Federal Government directive and release of funds for mass pre-paid metering and report findings to it.

It also urged the committee to enforce and ensure the judicious utilisation of the N10.5 billion naira penalty imposed on DISCOs

It further called for investigation of the operations of DisCos to ascertain the current status of metering and their extent of compliance with relevant legal and regulatory frameworks in service delivery.

The Senate directed NERC to furnish the committee with any relevant documents on metering of electricity consumers, post privatisation requirements for operation of DisCos and evidence of regulatory actions taken to ensure statutory compliance by DisCos.

Senate also directed NERC to ensure implementation of energy caps by all DisCos to unmetered customers in the country;

It further directed its committee to submit a comprehensive report for further legislative action.

Energy

Kyari emphasises role of gas in driving economic growth, industrial development

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The Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPC Ltd.) Mr. Mele Kyari, has reiterated the crucial role of natural gas in fueling economic growth and industrial development in Nigeria.

Kyari spoke at the public presentation of the book “The Rise of Gas: From Gaslink to the Decade of Gas” authored by Engr. Charles A. Osezua, which highlighted gas’ global acceptance as a crucial energy source that sustains economic growth and drives industrial activities.

Represented by NNPC Ltd.’s Head of Relationship and Stakeholder Management, Mrs. Oluwakemi Olumuyiwa, the GCEO also emphasised the importance of documenting Nigeria’s gas sector.

The GCEO underscored the significance of prioritising natural gas production and supply, particularly in the context of geopolitical dynamics and energy security in the global economy.

With Nigeria boasting substantial gas reserves exceeding 200 trillion cubic feet (Tcf) and the potential to reach 600 Tcf, the GCEO said it is pertinent that Nigeria leverages the gas resource for sustainable development, energy security, and job creation.

He noted that the book aligns with the Federal Government’s “Decade of Gas” initiative, aimed at optimising Nigeria’s abundant gas reserves for both domestic consumption and international export.

Kyari added that, as a key stakeholder, NNPC Ltd. has played a leading role in advancing the “Decade of Gas” agenda through strategic investments in critical gas infrastructure such as pipelines and processing facilities.

In his remarks, the author, Engr. Charles Osezua, who described the unveiling of “The Rise of Gas” as his contribution to Nigeria’s energy literature, expressed gratitude to the NNPC Ltd. for its support towards the book launch.

Osezua said NNPC Ltd.’s participation at the occasion underscores the company’s commitment to fostering knowledge sharing and innovation within the gas industry.

Also speaking, Chairman of the Impact Investors Foundation and former Group Executive Director of NNPC, Engr. Afolabi Oladele, lauded the book for its comprehensive insights into the gas value chain, saying it will be relevant to policymakers amid the global energy transition.

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Energy

Low crude production responsible for revenue loss —PETAN

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The Petroleum Technology Association of Nigeria has claimed that the country is losing a lot of revenue daily due to its inability to ramp up crude oil production.

The Chairman of PETAN, Wole Ogunsanya, stated this in Lagos recently when the representatives of the Association of Energy Correspondents of Nigeria, led by its Chairman, Ugo Amadi, paid a courtesy visit to PETAN.

He reiterated the association’s resolve to support the efforts of the President Bola Tinubu-led administration toward increasing Nigeria’s oil and gas production for maximum value.

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

According to Ogunsanya, if Nigeria could retain between 60 and 70 percent of the oil and gas value chain in the country, it stands a better chance of being among the top 20 economies in the world.

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

He pointed out that the country was underproducing to the tune of at least 500,000 barrels per day, which he said was a huge loss to the country.

The PETAN leader maintained that such losses would not have been possible if there had been full in-country retention of values and beneficiation across all the chains of the industry.

He explained, “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; processing it in power plants; and running pipelines to connect all those power plants. This country will be among the top 20 economies in the world.

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

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

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

Ogunsanya further said, “Our intention is to support this government, and this country to increase the 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 the production of oil and gas in this country.”

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

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

“We cannot do without you. Our message cannot resonate and cannot get across without your partnership with us.

“Essentially, we both need each other. PETAN needs you to tell that story, to sell what our vision is to help the situation we find ourselves in. We are going to support you as PETAN, as we have done in the past. I give you that assurance, we will work with you immediately,” he told the NAEC representatives.

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Energy

High tariff will lead to electricity theft — FCT residents tell FG

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Some electricity consumers in the Federal Capital Territory (FCT) have appealed to the Federal Government to review the new tariff  downwards to avoid electricity theft.

Some of the consumers who are mainly business owners  told journalists on Wednesday that if the cost of electricity remained high some of them consumers might bye-passing their meters.

Recall the Nigerian Electricity Regulatory Commission (NERC) had announced an increase in electricity tariff paid by Band A customers from N68/KWh to N225/KWh.

Band A customers are those who enjoy electricity supply for at least 20 hours per day.

The consumers, mainly printers, who do operate mainly at UTC and Murg Plaza in Area 10, FCT said that they use heavy equipment in doing their jobs hence their electricity consumption is high.

According to them, if they have to pay N225/KWh this will greatly affect their jobs making it difficult for them to cope with the present economic situation in the country.

Mr Amos Okolo, a printer, said that it was good that the government plans to give them 20 hours of electricity in the new tariff but the cost is too high for any business person.

Okolo said that by the time he purchases electricity with the huge money, nothing would be left in his business to cater for his family.

“I am appealing to the government to review the tariff downward as such increase can lead to some consumers bye-passing their meters and this is not good for Abuja Electricity Distribution Company (AEDC),”he said.

On his part, Mr Samuel Kolawole, also a printer, said that the cost indicated in the new tariff was so high that it could negatively impact businesses.

He said that the government should try and reduce the tariff so that it can benefit the rich and the poor people.

According to him, 20 hours of electricity is good for business owners as this will reduce the cost of buying fuel or diesel for generators but the pricing should be business friendly.

“We are appealing to the government to reduce the tariff to what we can afford so as to benefit everyone,” he said.

Also speaking on the issue, Mr Abel Ajibola, also a graphic designer at Murg Plaza said that the government means well for the people but the new tariff is outrageous, especially for small business owners.

Ajibola said that he would be glad if the government could review the tariff so that electricity consumers would not be tempted to start stealing electricity.

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