Energy Briefs
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THE Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, is worried over the casualisation of workers and vandalisation of pipelines. It has called for establishment of a pipeline protection agency to monitor and secure the nation’s petroleum products pipelines from vandals. Achese Igwe, president, NUPENG, who made the call at the union’s national education seminar held recently in Enugu, said the body should be provided with new technologies and sophisticated weaponry to guard the pipelines.
He expressed regret that vandals have been inflicting economic damage on the nation’s economy and appealed to government to put in place adequate measures to address the issue. Igwe said the call for the establishment of the agency became necessary following the recurring cases of pipeline vandalism despite the presence of the Joint Task Force, JTF, in the Niger Delta.
He pointed out that a pipeline protection agency would be saddled with the responsibility of monitoring the nation’s pipeline with new technologies and sophisticated weaponry. The NUPENG president also decried increasing cases of unfair labour practices in the petroleum sector. According to him, the practice of industrial relations has assumed a new dimension, adding that employers are playing politics in the privatisation and divestments of onshore oil fields hitherto owned by big multinational oil companies. This, he said portends danger for the union and its members.
“The oil and gas industry is passing through turbulent times now as the multinationals are devising all kinds of unhealthy industrial relations methods to emasculate our members out of the system. It is sad to note that NUPENG members in the formal sector are at the receiving end, as we are faced with negotiating redundancies almost on a daily basis now. It has not been easy for the union, as our members are depleting on a daily basis because of these retrenchments, redundancies, downsizing and harsh stance on even unionizing the members left in the new arrangement,” he said.
Igwe said employers in the sector are casualising workers with impunity, stressing that this have implications on the industrial relations atmosphere in the oil and gas industry. “Casualisation and contract staffing have become a social phenomenon and a hydra-headed evil in labour relations in the industry. What constitutes casualisation in the industry is the policy of the multinationals and oil service companies to convert established job positions to casual and labour contract workers in place of permanent labour employment. That is the placement of workers as temporary employees on job that is routine, continuous and permanent in nature. Whatever the nomenclature in use, the bottom-line is that these workers are not on the principals’ payroll and are being paid pittance wages by the service providers.”
The union president called for the speedy passage of the Petroleum Industry Bill, PIB, that would address all these challenges facing the oil and gas industry and ensure transparency, accountability and autonomy. He further called on the National Assembly to expedite action on the review of the Labour Act, 2004 as well as the passage of the anti-casualisation bill in order to provide a frame work to end casualisation.
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NERC to Ensure Lower Electricity Tariff
THE Nigerian Electricity Regulatory Commission, NERC, has said that the power distribution companies will not be allowed to increase electricity tariff as they work to repay the Central Bank of Nigeria’s N213 billion facility earmarked for operators in the power sector. Sam Amadi, chairman, NERC, said the regulator was never focused on increasing tariff.
“If anything, the regulator wants to keep the tariff lower than it could be. That is why we are a consumer protector. Our mandate in the law is to ensure that the operators are efficient, and when they are efficient, we allow them to charge the price that enables them to recover the reasonable and prudent cost of serving the customer. So, from this perspective, our commitment is to make sure that this sector continues to attract the right kind of investment that will lead to more availability and reliability. Apart from having the right price, you need a transparent and reliable regulatory framework to attract investment. This means that we must religiously follow our price methodology, except where it will work gross injustice or distress to consumers. The methodology requires us to review the pricing of electricity upon the occurrence of certain events,” he said.
According to Amadi, this was demonstrated when the commission carried out minor reviews and its outcome showed that the value of some core indicators had changed by more than five percent. He explained that the CBN fund would help to provide quick money that the power companies would pay with a longer tenor.
“So, instead of consumers paying the shortfall immediately and within five years, the fund helps power consumers not to pay immediately and to pay for 10 years. For the Discos, the fund helps them to get immediate money to settle their debts and repay for 10 years as they collect tariff from consumers. So, this fund is a relief. It is a like a debt-buy-back such that the CBN takes the debt but does not discount it. We still pay in full but for 10 years with a one-year moratorium. What this does is to provide the power sector with some needed liquidity and finance that will enable the industry to thrive and to quickly deliver more electricity to more Nigerian homes.”
The federal government recently announced a N213 billion facility to assist operators in the sector offset the huge legacy gas debts and redress their revenue shortfall in order to improve investment in the industry.
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Local Content Policy on Power
THE federal government is set to send a Nigerian content policy to the National Assembly. The policy is expected to guide the localisation of operations in Nigeria’s emerging electricity market. According to resolutions recently reached at the inaugural meeting of the National Council on Power, NACOP, the ministry of power is expected to finalise a draft policy on Nigerian content in the power sector, after which it will be sent to the National Assembly for legislation.
The policy will amongst others, require states and local governments across the country to maximise municipal wastes generated within their environments in promoting sustainable waste-to-power projects that will be embedded within their localities. As in Nigeria’s petroleum industry, the local content policy for the electricity market is perhaps planned to enhance indigenous participation in operations within the market, therefore, helping to grow the capacity of indigenous entrepreneurs and investors in the market.
“The council considered the reports of the sub-committees and made a number of far reaching decisions. Some of these decisions are: the need to put in place proper systems, processes, structures and framework to resolve power issues in the country. The draft policies on Nigerian power content policy, strategic framework on power and Key Performance Indicators (KPIs) should be subjected to stakeholder’s engagement for validation. Thereafter the Nigerian power content policy should be forwarded to the national assembly for legislation,” the council stated at its recent meeting to deliberate on the proposed policy,” it stated.
The ministry also recommended for adoption with regards to vandalism of critical assets in the power sector, a range of measures which include; legislation of stiffer punitive sanctions, deployment of appropriate technology for monitoring and tracking of vandalism and facilitation of multiple levels of engagement for community involvement and awareness in the fight against vandalism of power infrastructure.
Other measures that recommended against vandalism were encouragement of relevant law enforcement agencies to ensure speedy prosecution of arrested vandals to serve as a deterrent to others on continuous disruption of power infrastructure as well as requests from State governments and local communities to deploy resources to prevent vandalism on power assets.
With regards to waste-to-power the council recommended that federal ministry of power and State governments should develop and implement waste-to-power plants as embedded generation to supplement electricity generation and clean up litters and wastes in cities across the country. It further asked both tiers of government to allocate a minimum of 10 percent of their annual budget provision for the development of power projects while 50 percent from the allocation should be dedicated to rural electrification projects.
— Oct. 20, 2014 @ 01:00 GMT
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