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Senate says agreement with Azura power plant is a drain on nation’s resources

The recommendations were presented by Chairman of the Committee, Sen. Gabriel Suswam during plenary.

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Africa50 invests in Azura-Edo IPP, to boost power supply

The Senate has described the Share Purchase Agreement (SPA) between the Federal Government and Azura Power Plant as a drain on the nation’s resources.

The lawmakers called for a review of the SPA on Wednesday after the committee on power made the recommendation, according to News Agency of Nigeria.

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The recommendations were presented by Chairman of the Committee, Sen. Gabriel Suswam during plenary.

READ ALSO: Fashola to fix 44 roads across Nigeria with Sukuk funds

Suswam, who said that the agreement between the Federal Government and Azura power plant was signed between 2016 and 2017, explained that government ordinarily shouldn’t have signed those agreements.

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What it means: The agreement, according to the lawmaker, means that the nation must pay for any amount the plant claim to generate and it does not matter if they are consumed or not.

He said, “What we signed is that we signed that even if we are unable to take that 450 megawatts we still pay full price for 450MW. You call those agreements take or pay.”

READ MORE: Tether market capitalization surges close to $10 Billion

Other recommendations Suswam said include the need to revisit tariffs that had been set in the 2016 to 2018 Minor Review of the Multi Year Tarrif order (MYTO) 2015 and Minimum Remittance Order for the year 2019.

This, he said was to clearly determine if N600 billion Payment Assurance Guarantee (PAG) being processed for disbursement would be sufficient to cover the tariff shortfalls that would arise if retail tariffs did not rise as envisaged.

“The gap between reality of Distribution Companies (Discos) and National Electricity Regulatory Commission (NERC) projections needed to be streamlined.

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READ MORE: UPDATED: FG appoints Eweluka as NBET MD, as finance, power ministers wrestle

” This is on account of the fact that Ministries, Departments and Agencies (MDAs) including Federal, State and Local governments had not paid their legacy debts (2015-2018) or the current bills going forward in 2019.

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“There should be an immediate removal of the increased custom duties of 35% to allow Metre Asset Provider (MAP) clear meters stuck at the port,” he added.

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In his remarks, President of the Senate, Ahmad Lawan said that the report by the committee was so important.

“The power sector is the way for Nigeria to industrialise; in fact even to reduce the level of insecurity in the country by providing opportunities for wealth creation and jobs.

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”We will continue to insist that the power sector performs better than what it is and this privatisation definitely has not been working for Nigeria and we need to look into it again.”

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Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

1 Comment

1 Comment

  1. 9jaRealist

    July 23, 2020 at 1:53 am

    It is it a Share Purchase Agreement, but rather a Power Purchase Agreement. It sounds like the same sort of a Take-or-Pay arrangement that has gotten Ghana into loads of debt. Not surprised though, since government folks are usually dazzled by overseas trips and estacode, instead of getting competent advisors to negotiate these sophisticated deals. Dear Senators, in business, you do not get what is fair, but what you negotiate.

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Appointments

Nnaemeka Ewelukwa assumes office as new MD/CEO of NBET

Dr, Eweluka replaced the sacked Dr. Amobi as NBET Chief before full assumption in August 2020.

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Dr Nnaemeka Ewelukwa has assumed office as the new Managing Director/Chief Executive Officer of the Nigerian Bulk Electricity Trading (NBET) Plc. This was announced earlier today by the Federal Government of Nigeria.

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The Backstory: In December 2019, the former CEO of NBET, Dr Marilyn Amobi, was suspended by Nigeria’s Minister of Power. This followed a series of complaints made against Dr Amobi who was appointed to the position in 2016. Following her sack, the Minister of Power also noted that he was seeking to bring sanity back to the system. A committee was also set up to investigate the many complaints against the former NBET CEO.

“In view of this, the minister has also directed the Constitution of a 5-man investigative committee to look into the myriads of complaints against the MD/CEO (of NBET) with the view of restoring sanity in the management of the company. Consequently, she is to handover to the most senior director in the organisation,” a statement issued by Aaron Artimas, the spokesman of the Minister of Power had read.

Interestingly, President Muhammadu Buhari reinstated Dr Amobi in January this year, but then finally sacked her later in June. Now, Dr, Eweluka, who was earlier announced as Amobi’s replacement, has now taken over.

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Before now, Eweluka was appointed the General Counsel and Company Secretary of NBET in march 2012. He has also served as a Technical Adviser with the Presidential Task Force on Power (PTFP) where he was a member of the Regulatory and Transactions Monitoring Unit.

He graduated with an LLB from the  University of Nigeria Nsukka, an LLM in International Business Law from the London School of Economics and a PhD from Queen Mary, University of London.

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Energy

IPMAN orders fuel marketers to sell fuel at old rate until new directive from PPPRA

The ex-depot price is the price at which depot owners sell petroleum products to retail marketers.

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IPMAN, PPPRA, NNPC, Reduce funding oil subsidy - IMF to Nigeria , Oil marketers, PENGASSAN call for subsidy removal 

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has ordered its members to continue selling Premium Motor Spirit (PMS), known as fuel, at the old rate of N143 per litre until there is a new directive from the Petroleum Products Pricing Regulatory Agency (PPPRA).

This was disclosed by the National Public Relations Officer of IPMAN, Alhaji Suleiman Yakubu, during a media chat with the News Agency of Nigeria (NAN) on Wednesday in Abuja.

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While reacting to the recent increase in the ex-depot price to N138.62 per litre from the previous N132.62 per litre, Yakubu revealed that IPMAN would brief its members on a new price regime once it receives a directive from PPPRA.

READ ALSO: Petrol sells at lowest price in North East Nigeria – NBS 

Recall that Nairametrics had reported that the Pipeline Petroleum Products Marketing Company (PPMC), a subsidiary of NNPC, recently fixed the ex-depot price for PMS at N138.62 per litre. PPMC’s Sales Manager, Mohammed Bello, had noted that the new price would take effect from August 4, 2020.

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It should be noted that the ex-depot price is the price that depot owners sell petroleum products to retail marketers.

In the meantime, some media reports revealed that some fuel marketers had adjusted their pump price to reflect the new rate. It was reported yesterday that fuel marketers in Kano State increased the pump price of N150 per litre.

READ ALSO: NNPC reduces fuel price to N108 per litre

Some of the stakeholders in the downstream sector recently pushed for an increase in the pump price of petroleum products to reflect the current reality.

In the wake of the oil price crash, the Federal Government had announced the deregulation of the downstream sector of the oil industry with the removal of fuel subsidy.

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Business

NNPC records 43% drop in pipeline vandalism in May

Mosimi-Ibadan pipeline axis accounted for 38% of the vandalized points.

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Mele Kyari, NNPC, NNPC spends estimated N33.60/litre on petrol subsidy, NNPC vows to be transparent, set to publish details of petroleum product supplies , OML 119: NNPC record 14 bids for development of oil well, This NNPC initiative aims to solve the problem of tanker explosions , Fluctuations of oil price threatening Nigerian content development — NNPC , Lagos pipeline leak contains water, not petrol- NNPC, NNPC gives condition for relocation of tank farms and depots from residential areas , NNPC to cultivate 2,675 hectares of cassava for Ethanol production

The Nigerian National Petroleum Corporation (NNPC), last May, recorded a 43% drop in cases of willful damage of its oil pipeline infrastructure by suspected oil thieves.

This was disclosed in a statement signed and released by the corporation’s Group General Manager in charge of Public Affairs Division, Dr. Kennie Obateru, on Wednesday.

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According to him, the May 2020 version of the NNPC Monthly Financial and Operations Report (MFOR) indicated that 37 pipeline points were vandalized. This represents about 43% decrease from the 65 points recorded in April 2020.

READ ALSO: NNPC releases audited financial statements, refineries record losses of N154 billion

Vandalised spots: Mosimi-Ibadan pipeline axis accounted for 38% of the vandalized points while Atlas Cove—Mosimi axis recorded 19% of the breaks. Suleja-Kaduna logged 16% of the breaks, while other locations make up for the remaining 27%.

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Obateru explained that in collaboration with the local communities and other stakeholders, the NNPC would continuously strive to bring the malaise under control.

More details: Moving on, the Corporation gave details about how much was generated from the sale of products during the period under review. For instance, N92.58 billion was made from the sale of white products by PPMC in May 2020.

READ MORE: FPI and FDI drop to $68 million and $18 million respectively in April, lowest since 2016

Total revenue generated from the sales of white products for the period stood at N2,393.88 billion, where PMS contributed about 98.84% of the total sales with a value of N2,366.15 billion.

In the gas sector, natural gas production in May 2020 increased by 2.38% at 226.51 billion Cubic Feet (BCF) compared to output in April 2020; translating to an average daily production of 7,480.36million Standard Cubic Feet of gas per day (mmscfd).

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Likewise, the daily average natural gas supply to gas power plants increased by 5.87 per cent to 834mmscfd, equivalent to power generation of 3,128MW.

READ MORE: PoS transactions hit N1.64 trillion in 5 months, highest in 4 years

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The NNPC’s May report also noted that the group’s operating revenue increased by 15.33% or N31.68 billion to stand at N238.33 billion, while expenditure for the month decreased by 0.76% or N1.81 billion, to stand at N235.66 billion.

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The May 2020 report indicated a trading surplus of N2.68 billion compared to the N30.81billion deficit posted in April 2020 when the effect of COVID-19 was at the peak, leading to reduced demand with fluctuating prices.

The NNPC report said the 109% upturn in revenue this month is the cumulative result of improved performances by some of the corporation’s Strategic Business Units.

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While the Nigerian Petroleum Development Company (NPDC) posted a surplus due to substantial growth in the market fundamentals as demand began a slight recovery, the Nigerian Gas Marketing Company (NGMC) recorded 257% increased profit attributed to improved debt collection.

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