PIB Delay and Gas Shortage

Fri, Dec 27, 2013

By publisher

6 MIN READ

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THE National Electric Regulatory Agency, NERC, has blamed the current worsening state of power supply in the country on shortfall of gas supply to the generation companies. Sam Amadi, chairman, NERC, said the National Assembly should expedite action on the passage of the Petroleum Industry Bill, PIB, in order to enhance the commerciality of gas to power to ensure improved electricity supply in the country.

“Gas supply is largely responsible for the current drop in generation. As at December 8, 2,859 megawatts was un-utilized capacity due to gas shortage. NERC therefore urges the National Assembly to quickly pass the Petroleum Industry Bill as it will further enhance the commerciality of gas to power,” he said.

Amadi also denied that approval was given for any increase in power tariff, saying, “NERC hereby informs the general public that it has not approved any increase in electricity tariff or charges by the electricity distribution companies, DISCOs. We want to make it clear that NERC has not sanctioned any illegal increase by any DISCO. However, customers who feel that they are victims of such purported increases should come forward with evidence. NERC will, in turn, send out a team to investigate.”

Amadi who confirmed that the market operators have remitted a total of N2 billion for the settlement of service providers as at last Monday, added that the agency had completed plans to set up a committee to look into the issues raised against Multi-Year-Tariff-Order, MYTOII, by Disco operators in Kano, Yola and Jos.

He said also that the commission was presently making preparations for the MYTOII minor review which would come later this month. “Updates on the MYTOII minor review will be communicated to all stakeholders in due course. The new owners of the recently privatised utility companies cannot unilaterally increase electricity tariffs and charges without the express approval of the regulator, the NERC. Companies who want to charge more for their services must apply for a rate review. Once this application is received by the Commission, a thorough and transparent process of stakeholder engagement follows.”

IPMAN Supports Sale of Refineries

THE Independent Petroleum Marketers Association of Nigeria, IPMAN, has directed its members to sell kerosene at N50 per litre in their filling stations. It also said that the federal government’s plan to privatise the four refineries would enhance the quality and supply chain of petroleum products across the country.

Chinedu Okoronkwo, national vice-chairman, IPMAN, said that the association would sanction members who flouted the directive. “We have been mandated to ensure the sale of the product at the regulated price of N50 per litre in all our filling stations and which we are complying. The association has been at the vanguard of ensuring that the product that is meant for the local people is sold at approved government price. This has also been the focus of IPMAN and the minister of petroleum resources,” he said.

The IPMAN directive came against the backdrop that kerosene price has hovered between N120 and N130 in the last two years, despite government’s insistence that the product is subsidized and should sell at N50 per litre. “I want to assure every Nigerian that if the process is sustained, it will go a long way in assisting the general populace.”

The IPMAN boss commended the management of the Nigerian National Petroleum Corporation, NNPC, and the Pipelines Products and Marketing Company, PPMC, for the distribution of kerosene to marketers. He advised the companies to be consistent in the supply of the product to marketers and ensure effective monitoring.

Okoronkwo also called for increase in the use of cooking gas by Nigerians, stressing that other countries had changed from kerosene to gas. “I want to assure Nigerians that a lot has been done by government to ensure that the use of gas has come to stay. If you go to Benin, we have compressed natural gas and in Lagos, NIPCO has 5,000 metric tonnes of LPG. We are trying to create awareness among the people about the essence of gas usage, advantages and prices,” he said.

How European Union Can Assist Nigeria

THE European Union, EU, has agreed to partner with the federal government to ensure the provision of electricity to rural communities not captured in the national grid. To this end, the two have agreed to hold further meetings with a view to working out areas of cooperation towards building enhanced power infrastructure and improving electricity supply to the country.

Chinedu Nebo, minister of power, informed the EU delegation, led by Ambassador Michel Arrion, head of EU delegation to Africa, at a meeting in Abuja that the federal government had embarked on a robust programme of electrification of the rural areas in Nigeria not captured in the national grid.

Nebo, who expressed sadness that the EU countries showed little enthusiasm during the massive privatisation programme the nation recently concluded, explained that the lukewarm attitude gave room for countries like China to seize the momentum by investing billions of dollars in the power sector during the period. He also said that the EU countries still had a golden chance to get involved in the opportunities being provided in the area of rural electrification, particularly in exploring investment initiatives, provision of expertise and assistance in capacity building of renewable energy on which the fresh initiative, which pilot projects have already begun is hinged, to enable the programme succeed.

He also notified the delegation that such assistance could also come in the area of energy conservation, stating that since about 90 percent of the energy usage in the country was dedicated to lighting, it would be good to develop energy efficient bulbs, which he believed the EU countries had the expertise to achieve. Assuring that the demographic indicators on investment in Nigeria were quite encouraging to stimulate the interest of the EU, he said it was necessary for the body, which members were Nigeria’s old allies, to invest in the development of critical infrastructure in the sector.

The Minister also spoke to his visitors on funding expectation, saying, for instance, that he was concerned that a particular fund the ministry’s training institute was supposed to draw from,  by NAPTIN had not materialized, and wondered whether there were conditionalities Nigeria had not met.

In his remark, Arrion, while acknowledging that the EU members actually had the capacity to assist in the areas outlined by the Minister, assured of the possibility of a robust relationship in the area of investment and assistance. He a said that EU countries had experience in off-grid power provision but that attracting investment in that area was quite key. He added that his team was interested in developing a conducive environment for such investment. This will be done through the provision of funding gap from its grants to match other funds from financial institutions and other multilateral agencies for the execution of power projects.

Compiled by Anayo Ezugwu

— Jan. 6, 2014 @ 01:00 GMT