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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.

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FG, Labour agree cut in electricity tariff for 3 months, to distribute 6 million free meters, SPW jobs, FG kickstarts its 774,000 jobs SPW initiative as Buhari backs Keyamo, FG urges DStv, MTN, others to offer free subscription, airtime, data to Nigerians

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.

READ: Federal Inland Revenue Service hints at harmonised Tax Bill

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

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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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READ: Power: Liquidity crisis, same old story in 2020?

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

READ: FG estimates that alternative petrol, CNG would cost N97 per litre

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.

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READ: FG announce extension of suspension of new electricity tariff by 1 week

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]

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        Energy

        Carbon Tax: A market-based alternative to carbon emissions in Nigeria

        A carbon tax is a way to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.

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        climate, Understanding Carbon Credits and Carbon Offset market

        Fossil Fuel is hurting us. It is an undeniable truth. I have heard in many conversations more often than not a very solid support for the fossil industry. Rather simple conversations on its perils and disadvantages always end with resignation by the other party that “fossil has come to stay.”

        While not doubting that premise, I rather believe a lot can be done to limit the harmful effect of what is here to stay with us. A lot can be said about how beneficial fossil fuel is to the economy and how it is initially cheaper and more available but, in truth, the harms still exists.

        Sadly, these harms are more than good. The clarion call to stop these emissions has been on for a very long time, but the reality remains the attention span of the larger consumer population is very very short when it comes to that discourse.

        I would say, the essence and need for us to look to further means to mitigate the harm from fossil fuel is not just for a cleaner environment but also for an environment to still exist. The constant clamour for a change in our perspective is not just for the growth of the alternative sector but also a struggle for survival, because we will all lose if we do not stop.

        Now, since we have declared to ourselves that we wouldn’t stop, it only makes sense if we can effectively checkmate how we continue with fossil, adopt Carbon Capture techniques and in an attempt to make sure no one goes overboard, impose fines on the amount on those that burn beyond their limit and on fossil that enters the country. This is a concept that, rather thankfully, already exists. Carbon Tax.

        A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). A carbon tax is a way — the only way, really — to have users of carbon fuels pay for the climate damage caused by releasing carbon dioxide into the atmosphere.

        It is a market-based alternative that helps the government reduce the carbon footprint and also allows them make money as a government when there is a breach of this solemn oath to stay in check. In Nigeria, The Carbon Tax Act came into force on 1 June 2019. The carbon tax was designed to apply to direct emissions in the following categories as specified in the National Greenhouse Gas Emission Reporting Regulations:

        • Fuel combustion, which relates to emissions released from fuel combustion activities;
        • Fugitive emissions from fuels, which relates to emissions mainly released from the extraction, production, processing, and distribution of fossil fuels; and
        • Industrial processes emissions, which relates to emissions released from the consumption of carbonates and the use of fuels as feedstock or as carbon reductants, and the emission of synthetic gases in particular cases.

        It is trite to say that this entire scheme is altogether ineffective and barely surviving. It is sad to note because there are numerous benefits to Carbon Tax. The advantages of doing this asides still having a healthy civilization in the next 100 years are numerous. First, it would be creating a very profitable system of revenue for the government. Here, the government will not need to spend much on the initial cost of having this revenue stream in place. Aside from the need to establish an agency to enforce the limits and payment of fines and the adequate system of calculating and verifying the amount consumed, the expenses on the government is almost Zero. This agency unlike many others in this country will be more active than idle, considering the existence of various fossil burning industries in Nigeria and being largely oil-dependent.

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        Secondly, this would help Nigeria join the global effort to reduce the carbon footprint and in turn put Nigeria on the good pages of the global community as a contributor to green energy. This will birth a host of benefits for the Nigerian Community and also assist the domestic green energy advocates.

        Furthermore, this system will help to promote the alternative energy industry. The renewable energy industry will from this initiative be able to sufficiently measure the actual impact of their activities on the environment and the economy as well as challenge the growth of new innovations to grow it. The campaigns will no longer be dependent on cancelling out the large emissions killing the environment since more revenue now streams for the government from them, but to the actual direct benefits of renewable energy.

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        This alternative will also assist the government in assessing the benefits of reducing emissions and growing the renewable energy industry. The implementation of this will serve as a step for the assessment and understanding of the dynamics, policies and funding needed for the full inevitable integration of Green Energy.

        The advantages are numerous and as such need Carbon Taxing to be revived in the country. In all sincerity to the dynamics of Nigerian politics and due respect to our exalted government, it is almost too easy for these things to be put in place seeing they will also have a fresh channel to loot from while saving our dear lives and making the air cleaner. A Win-Win for all the parties involved.

         

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        Written by Ude Fortune Chiziterem

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        Business

        PIB: FG adds more terms to bill to attract more investors – Report

        The FG has made some changes to the PIB in a bid to attract more investors to Nigeria’s oil and gas sector.

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        The Nigerian government has added some changes to the Petroleum Industry Bill (PIB) which includes the reduction of hydrocarbon tax to 30% for converted leases, down from 42.5% in its original bill plan, in a bid to attract more investors to Nigeria’s oil and gas sector.

        This was disclosed by Reuters in an exclusive report on Friday, which cited people close to drafting the bill and revealed a letter from interested oil companies.

        The report disclosed that the Bill was expected to be passed in May, and would have some later stage changes such as:

        • Lowering of royalties for new production from deepwater oilfields to 5% from 7.5% and boosting the production level that triggers higher royalties from 15,000 barrels per day (bpd) to 50,000 bpd.
        • For onshore and shallow water oilfields, it will reduce the hydrocarbon tax to 30% for converted leases, down from 42.5% in the original bill.
        •  NNPC’s assets and liabilities will be transferred to a limited liability corporation, which will enable oil companies receive debt owed by NNPC.

        The report revealed that oil executives in their letter urged for more changes regarding gas and fiscal term stability, stating that “terms are not sufficiently competitive to stimulate the desired new investments.”

        What you should know 

        Recall Nairametrics reported in December 2020 that the Minister of State for Petroleum Resources, Timipre Sylva, revealed that the much anticipated Petroleum Industry Bill (PIB) would include provisions for lower taxes to sustain stable investments in Nigeria’s oil sector.

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