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Energy

FG to save N1 trillion annually from petrol subsidy removal

The Minister noted that the removal of fuel subsidy will save Nigeria up to a trillion every year.

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FG estimates that alternative petrol, CNG would cost N97 per litre, New PIB amends royalties by oil firms as Sylva clarifies position on scrapping of NNPC, autogas, FG to establish petroleum depot, oil and gas logistic centre in Akwa Ibom

The Federal Government has disclosed that it expects to save as much as N1 trillion ($2.6 billion) annually, and create massive jobs following the removal of fuel subsidy.

The disclosure was made by the Minister of State for Petroleum Resources, Timipre Sylva, during an interaction with newsmen in Abuja on Thursday, September 11, 2020.

READ: FG to give up majority stakes in its 4 refineries, to be privately managed

Sylva said, “It is time for Nigerians to face reality and do the right thing. What is deregulation going to do? It is going to free up a lot more money. At least from the very beginning, it will save us up to a trillion, and more every year. Already, we have taken off the budgetary provision for the subsidy which is about N500 billion in the budget.

“Also, we have taken off the excess forex price that special rate that was given to NNPC which also came at a cost. So, all the money that we used to defend the Naira at that time to subsidize the dollar will now be freed up for development. I believe that this discussion around subsidy has been a vexed issue that has captured the imagination of this country for a long time now,” the minister said.

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READ: Government can unlock N4 trillion by removing these subsidies – PWC

He pointed out that past administrations had lacked the political will to deregulate the downstream sector, and remove subsidy despite attempts to do so. At some periods, the time was not good for it.

The Minister said, “And why did I say that time was not good for it? Does that imply the time is good for it now? The problem around deregulation is that people must understand first that the product we are talking about is a derivative of crude oil.

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READ: Subsidy and PIB

“It is refined from crude oil. Therefore, it has a direct relationship with the price of crude oil. If the price of crude oil goes up, then you expect that it would reflect in the price of the derivative.

“So, the best time to achieve this we looked at was the time when crude oil prices are low so that Nigerians will get the benefit of those low prices.’

READ: FG gives reason oil marketers are not yet importing petrol, stops monthly price fixing

The Minister, however, lamented that when the Federal Government announced the deregulation policy in March, and reduced the price of petrol which was beneficial to consumers, the price of services and goods in the market place did not reduce.

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“Whenever there is a kobo increase in the pump price of petrol, people will use it as an opportunity to triple the selling price of their commodities,” he said.

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Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

1 Comment

1 Comment

  1. Victor Etoruom

    September 11, 2020 at 6:54 am

    It’s a shame the minister is bold enough to only link the price of the products to the price of crude oil simply because it is Refined Petroleum.
    He’s definitely not oblivious of the fact that this also has to do with us importing RP rather than refining domestically.
    The basic problem constituting over 60% of the high price is the non-functionality of our refineries (yet the NNPC benefits from statutory transfers in every budget as part of the GOEs).

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Energy

Togo, Niger, Benin remit N2.04 billion to Nigeria for power supply

Nigerian Electricity Regulatory Commission says international electricity customers remitted the sum of N2.04billion to Nigeria in three months.

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Togo, Niger, Benin remit N2.04 billion to Nigeria for power supply, NERC postpones increase of electricity tariffs

Nigeria’s international electricity customers – Togo, Niger, and Benin, remitted the sum of N2.04billion in the first quarter of 2020, as their outstanding electricity bill to the Market Operator (MO) of the sector in Nigeria.

This was found in the Nigerian Electricity Regulatory Commission 2020 first quarter report, which was released recently.

READ: FG to inject over N198 billion on capital projects in power sector in 2021

According to the report, a total of N4.05billion ($13.22million) invoices were issued by the MO to international customers including Societe Nigerienne d’electricite or NIGELEC; Societe Beninoise d’Energie Electrique (SBEE); and Compagnie Energie Electrique du Togo (CEET).

The commission stated that during the quarter, NIGELEC made a payment of ₦1.61billion ($5.27million) as part of its outstanding bills for the energy received from NBET and services rendered by the MO.

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READ: Nigeria to fix irregular power supply in 40 years- Senate

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It stated, “Similarly, SBEE paid ₦0.43billion ($1.39million) in respect of services received from MO.

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“It was noteworthy that tariff shortfall (represented by the difference between actual end-user tariffs payable by consumers and the cost-reflective rates approved by NERC) had partly contributed to liquidity challenges being experienced in the industry.

“The settlement ratio to the expected Minimum Remittance Thresholds, having adjusted for tariff shortfall, indicated that power distribution companies needed to improve on their performance.”

READ: Shell to cut 9,000 jobs globally due to oil price crash as it shifts to clean energy

But

Special customers like Ajaokuta Steel Co. Ltd and others in its environs did not make any payment in respect of the N0.27billion and N0.05billion invoices issued to them by the Nigerian Bulk Electricity Trading Plc and the MO respectively, during the period under view.

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Meanwhile, the power distributors failed to remit N119.88billion to the sector within the same period.

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READ: FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

Whereas Discos were expected to make a market remittance of 46.09% during 2020/Q1, only 32.53% settlement rate was achieved within the timeframe provided for market settlement in the Market Rules,” it added.

What it means: The Discos’ remittance level, regardless of the prevailing tariff shortfall, was still below the expected MRT and they are expected to improve on their performances.

READ: Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs 

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Energy

Nigeria to fix irregular power supply in 40 years- Senate

40 years is needed due to underfunding and the FG’s failure to fix the challenges of electricity generation.

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Nigeria to fix irregular power supply in 40 years- Senate, Customers to pay for metering through cost of tariff- NERC

The Nigerian Senate has said that it will take Nigeria 40 years to fix irregular power supply.

This was disclosed by the Senate Committee on Power on Tuesday after the Minister of Power and his team made a presentation to the Committee, according to Guardian.

READ: N2trillion Mambila project: FG starts disbursement of compensation funds

The four decades wait, according to the lawmakers, is due to underfunding and the Federal Government’s failure to fix the challenges of electricity generation.

The committee was astonished by the submission of the Minister of Power, Mamman Saleh, that of the N165billion required for capital projects in 2020, N4billion was given as bribe of which only N3billion was cash-backed.

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READ: FG guarantees mortgage loan to low income buyers at low interest rate

In lieu of this, the Committee dismissed claims made by the minister over raising hope on early provision of constant power supply, while Managing Director of the Transmission Company of Nigeria (TCN), Sule Ahmed Abdulaziz, painted a gloomy picture during the ministry’s budget defense.

A member of the Committee, Danjuma Goje, expressed concern that based on Abdulaziz’s presentation, N165billion was proposed, but the ministry gave N4billion in envelope, insisting that it would take 41 years to deliver constant electricity when N165billion is divided by N4billion.

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Backstory

Recall that Nairametrics had earlier reported that it will take nothing less than $100 billion to enable stable power supply in Nigeria.

READ: Bitcoin Whale transfers $1.1 billion worth of crypto for $3.58

What they are saying

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Mr. Danjuma expressed pessimism over hopes of stable power supply in the country. He went as far as stressing that even if ongoing projects are being completed there is still no hope for stable transmission of power in the country.

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Mr. Danjuma was quoted as saying: “Going by the minister’s presentation that transmission gas increased from 5000 to 8000 megawatts, it is not enough. When dishing out figures, we should bear in mind that capacity, transmission, and distribution have increased and that Nigerians, manufacturers, and industrialists want to see stable electricity.

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Energy

FG set to create at least 5 million jobs for youths in the power sector – Minister of Power 

FG is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.  

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FG set to create at least 5 million jobs for youths in the power sector – Minister of Power , Consortium of Western investors to inject upwards of $5 billion in Nigeria's renewable energy sector, Power: Nigeria's deal with Siemens - the birth of a new era?

The Minister of Power has disclosed that the Federal Government of Nigeria is set to create at least 5 million jobs for the youths, through its 5 million solar power initiative and other projects.  

This was disclosed by Engr. Sale Mamman, The Minister of Power, during a stakeholder meeting in Jalingo, the Taraba state capital, where he addressed youths on the need to foster peace and harmony. 

READ: FG discloses how the problem of the power sector was created

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

Mamman, stated that in line with the demands of the youths, the Federal Government is set to create massive job opportunities for Nigerian youths in the power sector through its 5 million solar power initiative. 

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This initiative includes the five million Solar Home System (SHS) project, the Mass Metering Scheme, among others. 

The minister lauded the youths for making their voices heard on developmental issues, He urged the youths to shun violent protest while giving the President a chance to implement their demands and other ongoing robust projects on youth empowerment. 

READ: How Geregu Power became one of the best performing power plants in Nigeria – Akin Akinfemiwa

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What they are saying 

Speaking on the initiative to immerse 5 million Nigerian youths into the power sector, the minister said: 

“Plans are ongoing to kick start this and it is being designed to ensure that majority of the firms and the installers are Nigerian youths. This is also part of the commitment of President Muhammadu Buhari’s focus on lifting 100 million people out of poverty within 10 years. 

READ: Toyota begins solar testing for electric cars as market competition heats up

“From the briefings I have received so far, the youths are taking up opportunities in this aspect as well as in renewable energy. This is another way the government will be empowering young Nigerians as the local assembly; installation and the maintenance of these meters are largely handled by our industrious youths.” 

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“The minister urged the youths to vigilant and resist and attempt by some people to use them to incite violence for their sinister motive, noting that the Federal Government was tailoring more programmes for the youths through the Siemens Presidential Power Initiative and in building capacity on renewable energy.” 

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READ: Buhari to commission Lagos-Ibadan railway January 2021, starts operation November 2020

“There is the assurance of Mr. President that Nigerians will be beneficiaries of the Siemens project which will turn around the power supply situation of Nigeria. When this happens, industries will be revived and SMEs driven by youths will thrive more. 

READ: Senate summons Fashola, Ahmed over contract sum variation for Second Niger Bridge, others

What you should know 

  • The initiative is expected to commence with a target for one-million-meter installation at least by December.  
  • The implementing agencies of the initiative are the Rural Electrification Agency and the Niger Delta Power Holding Company. 
  • However, the Central Bank of Nigeria is supporting local firms and Meter Asset Providers on financing the initiative. 
  • The National Power Training Institute of Nigeria (NAPTIN) is expected to play an active role in order to ensure that more youths become solar power installers and dealers to create a whole new trend of skills for self-empowerment. 

READ: N75 billion Nigerian Youth Investment Fund to be rolled out before end of October – Minister

Why this matters 

The 5 million Solar project initiative will be implemented through the Economic Sustainability Plan steered by Vice President Yemi Osinbajo, and it is expected to create opportunities for manufacturers of solar panels, installers, revenue collection agents and technicians. 

This initiative is expected to reduce the level of unemployment in Nigeria, and cater to demands for better opportunities by the youths, through self-employment. 

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