Energy
FG, Labour agree cut in electricity tariff for 3 months, to distribute 6 million free meters
Labour and FG have reached an agreement to cut electricity tariff for 3 months and supply millions of free meters.
The Federal Government and the organized labour have agreed to provide a tariff relief of N10.20 per kilowatt-hour for Nigerians for the next 3 months and also distribute 6 million free meters following the completion of the 2 weeks suspension of electricity tariff.
According to a tweet post from the Minister of State for Labour and Employment, Festus Keyamo, this was disclosed in a communique made available to journalists after a lengthy meeting between the organized Labour and the Federal Government on Sunday evening.
READ: NERC fines power firm N10.2 million over illegal supply of electricity
The communique disclosed that the committee adopted a two-phase approach to proffer solutions which would help resolve issues affecting the electricity sector in the medium term, whilst providing relief to customers immediately.
They stated that the immediate relief would be provided to citizens for a 2 to 3-month period (which will not exceed December 31, 2020), saying it will be the timeline for the conclusion of an extended scope of work for the Technical Committee.
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According to the communique: “Following extensive analyses, it was realised that VAT proceeds from the Nigeria Electricity Supply Industry (NESI) could be used to secure varying levels of relief in customer tariffs across bands A, B and C, ensuring that all customers receive some form of relief during this difficult time. Cumulatively the per kWh relief that will be provided to customers in bands A, B and C is N10.20 per kilowatt-hour (kWh), which will be distributed across the bands. The relief will be in place for the 2 to the 3-month period required for the Technical Committee to conclude its extended scope of work. It should be noted that Bands D and E tariffs were not changed, and this freeze will remain in place.”
READ: NERC says Discos will compensate electricity consumers for power delivery failure
It was also disclosed that the National Mass Metering Programme (NMMP) will be accelerated. They stated: “This programme will distribute 6 million meters to Nigerians free, of charge. The Central Bank of Nigeria (CBN) having approved the funding for this programme, the meters will begin being distributed to consumers immediately using stockpiles in-country and local assemblers. The cost of meters shall be recovered from the DISCOs.
“The 6 million meters to be procured for the NMMP will only be through local meter manufacturers and assemblers. This will create jobs and a new meter manufacturing sub-sector in the country.”
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It was also resolved that there will be proper salary protection for electricity workers. They disclosed that In implementing payment discipline measures for the DISCOs, the Government will ensure the protection of the salary for Electricity Workers saying it will be protected in the revised payment waterfall structure for the NESI. Thus; “In order to protect customers from changes in tariff during the 2-3 month period of review by the Joint Technical Committee, DISCOs will be directed to temporarily suspend customer band migration. This means that while DISCOs are expected to fulfil their Performance Improvement Plans (PIP) thereby improving the quality of service to customers, no added charges will be passed on to customers during this period. This measure is aimed at building confidence in the Service-Based Tariff structure.’’
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On the inclusion of Labour representatives in NERC, it stated, “The committee had no objection to the inclusion of Labour into the Nigerian Electricity Regulatory Commission. Government is committed to fully engage Labour in the ongoing review of the Electricity Power Sector Reform Act (EPSRA) 2002. As a result, the Executive will recommend to the National Assembly inclusion of Labour representation into the Nigerian Electricity Regulatory Commission.”
READ: NERC revokes estimated billing methodology for electricity consumers
1. Labour & Govt have adopted these Resolutions of the Adhoc Committee I chaired. Highlights include using VAT proceeds to temporarily subsidize tariffs whilst my Committee will work for two more months to resolve other issues that may substantially affect tariff adjustments. pic.twitter.com/xbbs1QRUl8
— Festus Keyamo, SAN (@fkeyamo) October 11, 2020
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To further assure Nigerians of the new agreement, the Honourable Minister of Power, Sale Mamman took to his official Twitter handle to state that Nigerians will only pay for the energy they consume and also a plan to distribute 6million meters to homes and businesses were underway.
“To ensure that Nigerians only pay for the energy they consume, a Metering scheme that will see 6 million free meters distributed to Nigerian homes and businesses is set to commence this quarter,” Mamman tweeted.
READ: FG announce extension of suspension of new electricity tariff by 1 week
To ensure that Nigerians only pay for the energy they consume, a Metering scheme that will see 6 million free meters distributed to Nigerian homes and businesses is set to commence this quarter.
Good Morning and do have a productive week ahead.
— Engr. Sale Mamman (@EngrSMamman) October 12, 2020
Energy
FG hires litigation firm, Franklin Wyatt, in legal battle with Eni S.p.A
The Ministry of Petroleum Resources has hired a litigation firm to assist in its dispute with Eni S.p.A over oil rights and bribery allegations.
The Federal Ministry of Petroleum Resources has employed the services of Franklin Wyatt, a litigation settlement specialist, to take part in the talks with Eni S.p.A in a long-running dispute over oil rights and bribery allegations.
According to Bloomberg, the London-based consultancy, Franklin Wyatt, was contracted by the Minister of State for Petroleum Resources, Timipre Sylva, to represent and advise the Federal Government on outstanding commercial and legal issues over Oil Prospecting License 245 (OPL 245), through a letter dated June 29 and addressed to Matthew Carey, the Managing Partner of the firm.
This disclosure was made by the spokesman for the Minister of State for Petroleum, Garba Deen Muhammad.
The letter to the firm partly reads, “This serves as confirmation that Franklin Wyatt’s recruitment was approved by Nigeria’s president, Muhammadu Buhari, and may be produced as evidence of the firm’s authority to represent the ministry in discussions with relevant counterparties.”
Backstory
Nairametrics earlier reported that the Nigerian government, at a hearing into the alleged corruption linked to Eni and Shell’s acquisition of OPL 245, called for a guilty verdict and an advance payment of about $1.1 billion for damages, in one of the oil industry’s biggest-ever corruption trials.
Eni has also accused both Nigeria and US investment firm for assisting the country with its litigation against the Italian oil firm and accused Royal Dutch Shell of a lack of transparency in the $1.1 billion energy deal.
What you should know
- The 2011 purchase of OPL 245 by Eni and Royal Dutch Shell Plc has been subject to years of legal wrangling. The two companies, as well as some current and former executives, are on trial in Milan for allegedly making corrupt payments during the deal.
- Italian prosecutors have accused the companies of moving $1.1 billion into a Nigerian government escrow account to obtain the license in 2011, about $800 million of which was then used to pay bribes into private pockets.
- The current Nigerian government, which came to power five years ago, joined the case in 2018 as a civil party and asked for at least $1.1 billion in damages, while prosecutors are seeking a jail term of eight years for Eni Chief Executive Officer Claudio Descalzi. The tribunal is expected to rule early next year.
Energy
Nigerian firm set to raise $1.2 billion to purchase electricity meters
MAPCo plans to raise N480 billion to purchase electricity meters and to help the DISCOs plug revenue gaps in their operations.
A Nigerian firm, Meter Assets Finance and Management Company (MAPCo), has concluded plans to raise N480 billion ($1.2 billion) over the next 3 years, to purchase electricity meters and help the electricity distribution companies (DISCOs) plug revenue gaps in their operations.
This is also in line with the Federal Government’s initiative to ensure that all electricity consumers are metered, which will put an end to estimated billing by the DISCOs.
According to a report from PricewaterhouseCoopers, less than one-tenth of Nigeria’s 41 million households have their electricity consumption metered, and half of those are faulty. As a result, distribution companies have to estimate bills, resulting in constant conflict with the consumers that delay payments.
The Chief Executive Officer of New Hampshire Capital, Onion Omonforma, said the Meter Assets Finance and Management Co. hopes to end the practice of estimated billings by raising funds to purchase and supply meters to consumers.
New Hampshire Capital, FBNQuest and Kairos Investments Africa are helping to package and structure the venture, known as MAPCo, for investors to either buy equity or inject debt into the company.
What they are saying
Omonformaa said, “The electricity distribution firms will then have the money to go back and buy more meters and the cycle continues, paving the way to close the metering gap. MAPCo will collect the cost of the meters from consumers at a premium over the next 10 years. The meters will be handed over to the power-distribution companies once paid off.’’
While disclosing that MAPCo plans to issue a N100 billion bond in the next year, Omonforma also pointed out that roadshows have been planned for the U.S. and Europe, and will include local institutional investors.
He said, “We envisage that a lot of people who are looking for a long-term instrument will key into it,”
It can be recalled that apart from repealing the estimated billing methodology in determining tariffs for electricity consumers; the Federal Government had insisted that all consumers must be metered, as part of the condition for a tariff increase.
Also, as part of the agreement reached with the organized labor in respect of the tariff increase; the Federal Government disclosed that the National Mass Metering Programme will be accelerated, with the distribution of 6 million meters to Nigerians for free.
What this means
A huge number of electricity consumers across the 36 states and the FCT are still unmetered by their respective DISCOs. This initiative by MAPCo will help bridge the existing gap, with more electricity consumers acquiring a prepaid meter and doing away with the controversial estimated billing.
Energy
N1.5trillion accumulated losses of NNPC, a serious going-concern risk – PWC, SIAO Partners
The auditors of NNPC have raised doubts over the inability of the Corporation to continue as a going concern following rising and humongous losses.
According to the recently published 2019 Audited Financial Statements, the Nigerian National Petroleum Corporation (NNPC) Group and Corporation had an accumulated loss of N1.9 trillion and N474 billion respectively. The Auditors of NNPC, made up of Pricewaterhouse Coopers, SIAO Partners, and Muhtari Dangana & Co. have raised serious doubts over the inability of NNPC to continue as a going concern following rising and humongous losses, resulting in the negative capital base.
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In their report, the auditors disclosed that there is an existing material uncertainty that casts significant doubts on the ability of the NNPC to escape bankruptcy – as there are serious impairments on the company’s ability to generating sufficient revenues to meet its immediate obligations as at when due.
READ: NNPC reveals survival strategies to cope with oil sector downturn and new normal
What you should know
- In its joint report to the stakeholders, the auditors gave an unmodified opinion and drew attention to the fact that the NNPC Group and Corporation recorded net losses of N1.8 billion and N107.8 billion respectively in 2019, compared to N803.1 billion and N254 billion in 2018 respectively. While its current liabilities exceed its current assets by N4.4 trillion and N1.1 trillion for the Group and Corporation respectively, compared to N3.3 trillion and N968.7 billion in 2018 respectively.
- NNPC Group and Corporation’s current assets, according to the financial statements, stood at N5.3 trillion and N4.5 trillion in 2019, while total current liabilities stood at N9.7 trillion and N5.6 trillion respectively.
- In 2018, NNPC Group and Corporation’s total current assets stood at N5.4 trillion and N4.8 trillion respectively, while total current liabilities stood at N8.7 trillion and N5.7 trillion respectively.
- The accumulated losses according to the financial statement are approximately N1.5 trillion and N474 billion, compared to N1.6 trillion and N490.7 billion for the Group and Corporation in 2018 respectively.
READ: NNPC explodes, denies custody of $3.5 billion subsidy fund
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What to expect
- The Management of the corporation is currently executing robust mitigation procedures, as it is receiving the requisite support from the Federal Government to ensure that the Group and Corporation have adequate resources to continue in operational existence for the foreseeable future.
- To make the Group and Corporation commercially viable, the Federal Government had commenced the elimination of cost drivers responsible for the accumulation of the shortfalls in settling Domestic Crude Obligation; and the introduction of the Price Modulator mechanism in the Petroleum Products Pricing Regulatory Agency (PPPRA) template, designed to eliminate the major cause of the losses.
- The Federal Government is also minimizing breaches to the country’s pipeline networks; pursuing the passage of the Petroleum Industry Bill, PIB, and its implementation, which would restructure the petroleum industry, improve transparency and governance, and also give the NNPC the autonomy to operate profitably.
- The NNPC Management further revealed the plans to recapitalize the NNPC with steps to resolving all the outstanding related party payables and receivables and enable a clean slate start prior to recapitalization.
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David blunt
October 12, 2020 at 12:34 pm
No mention of prepaid meters. Sounds like a trojan horse offer to me
Anonymous
October 12, 2020 at 3:12 pm
We pray it get to us…
tope
October 12, 2020 at 5:06 pm
You will never get any of those free Prepaid meter. It will be resold to Nigerians. Why can’t they just liberalize the purchase of prepaid meters. That is what works in Nigeria. See the success of telecom. No monopolies. Why the sale of distribution when you are still going to encourage monopoly? Government should stop creating corrupt channels for extort Nigerians. #SellPrepaidMetersDirect2Customers. There is no need for this waste of monies.
Fa
October 12, 2020 at 9:00 pm
We this meter get to the common men or only for those in power?
Anonymous
October 12, 2020 at 9:16 pm
What disco’s are doing right now is fraud of the highest order, how can you billed a bungalow of just 7rooms #34,000 for electricity bill for the month of September, upon sharing of power supply. Please, you people should look into this, it’s outrageous and pathetic for charging that high for just a bungalow of just seven (7) rooms. Sylvanus.
Deji
October 13, 2020 at 2:09 pm
Please write them and complain of excessively charging you, let them acknowledge the receipt of the letter and take the acknowledged letter to your lawyer and sue them to court
Auxtine
October 14, 2020 at 2:03 am
They are mad,my compound in iyanaoworo we have been complaining that our bill is outrageous 30k a month for 5 people,only to see 66800 naira for September bill.
Edhereveno
October 15, 2020 at 9:03 am
Its very simple bro, there’s a price tag for all discos depending on their area of coverage, you shouldn’t mind that crazy bill given to, find out from ur area the approve price payable, and pay to them, they can’t disconnect u.
Kenny Oy
October 12, 2020 at 9:25 pm
THIS IS FRAUD ,
TIME TO GET RID OF THIS GOVT AND PARTY
ELECTRICITY SUPPLY IN NIGERIA IS ONE OF THE NOST EXPENSIVE I HAVE SEEN AND ITS NOT EVEN CONSTANT
Niyi
October 12, 2020 at 9:45 pm
The people that are employed to distribute the meters should be monitored if not they will be asking for money to give the meters out.
Anonymous
October 13, 2020 at 3:58 am
Story of the day
Chukwu Emmanuel
October 13, 2020 at 5:04 am
Pls end disco it is yahoo Yahoo boys is since 2016 buhari have kill Nigeria
Emo Diadenaru
October 13, 2020 at 6:56 am
We pray that these free meters to be distributed to Nigerians are free indeed and not hoarded by the handlers. For efficiency and accountability of this program, a task force be instituted by government to ensuring that on – the – spot allocation be made to avoid diversion.
Maryam
October 13, 2020 at 9:09 am
September bill is high even without constant electricity. We can’t boost of 8hrs of electricity in our area. How do we expect people to pay such bills at a time like this in our lives when even to feed is a problem. May Allah help us
Yuhana
October 14, 2020 at 7:08 am
You are talking 8 hours.i can’t boast of 4 hours. Now its worse, they have learnt the practice of 1 minute light. Nigeria needs change. Scam everywhere
Deji
October 13, 2020 at 2:06 pm
The new tariff was announced suspended, however my bill is almost doubled from last month the the current bill. The discos are running their own show and not doing what is in the news
Ikechukwu
October 15, 2020 at 12:20 pm
“This programme will distribute 6 million meters to Nigerians free of charge. The Central Bank of Nigeria (CBN) having approved the funding for this programme, the meters will begin being distributed to consumers immediately using stockpiles in-country and local assemblers. The cost of meters shall be recovered from the DISCOs”.
This is fishy and ambiguous, how is it free if the cost shall be recovered from DISCOs? Will the DISCOs not transfer this cost to their customers eventually?
Even if it is so, will this programme continue or is this just a benefit for only 6 million Nigerians? Why just 6m?
By the way, the hike in tariff was implemented in September despite the suspension. In August my household was billed N11,904.98 for 508KWH of power, the September bill is N25,364.69 for 438KWH. That is more than 100% increase from previous month. This is ridiculously ridiculous and unfair to most Nigerian consumers.
Ugoji
October 15, 2020 at 7:58 pm
Every day another story. Things just continue to get worst. Nobody is holding the DISCOS accountable. The so called NERC excels in juicy tilk without action. I’ve taken a case to them for adjudication. I discovered they are just in bed with the DISCOS. They do as they like without reference to the law and without consequence. Have you noticed that anytime there’s a big football match,they must take the light. That’s their arrangement with viewing center and beer palour owners, I found out. When shall we have a government and not these uncaring buccaneers?