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Energy

Buhari moves against DISCOs that collect money for prepaid meters

President Buhari has warned that tough measures will be taken against DisCos or their agents selling prepaid meters to their customers.

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Electricity, Buhari moves against Discos and agents that collect money for prepaid meters

President Muhammadu Buhari said he will enforce tough measures against any electricity distribution company (Discos) or their agents selling prepaid meters to their consumers, against the directive that they should be distributed free.

According to a report from Punch, this disclosure was made by the Special Adviser to the President on Infrastructure, Ahmed Rufai Zakar, who represented President Buhari at the FGN/NLC-TUC ad-hoc committee on electricity tariff stakeholders engagement in Ibadan, Oyo State on Wednesday, December 2, 2020.

He said the President understands the plight of Nigerians on issues surrounding electricity and is determined to deal with bad elements.

(READ MORE: Power: Distribution of meters resumes in Lagos, Abuja, Kaduna and others)

What they are saying

He said, “We have made it very clear through the regulator’s direct order, as well as intervention from the Ministry of Power that the meters are to be provided to Nigerians at no cost. Even for meters that were paid for, there is the directive from the regulator to the discos that they would need to find a way to reimburse those citizens over time.

“In cases where we find any disco or disco representatives selling the meters or exploiting Nigerians to be able to get meters by paying, we would take the full measures of the law. The President has mandated that these meters must be free. We have also said that they must come from local manufacturers. This would create jobs and revive our industry.

What you should know

  • The President had earlier directed that 6 million prepaid meters manufactured or assembled locally should be made available to electricity consumers to stop their opposition against estimated billing and even increase in electricity tariff.
  • While stating that he remains committed to the protection of poor and vulnerable Nigerians from increased electricity tariffs and arbitrary estimated billings, the President said he is working to ensure that Discos commit to increasing the number of hours of electricity supply everyday and improve on the quality of service.

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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    Business News

    Nigeria’s revenue crisis may further worsen as India cuts oil imports by $39.5 billion

    The revenue to be earned by Nigeria has come under further threat due to India’s drop in crude oil importation.

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    Now that oil is recovering, when will naira recover?

    The revenue to be earned by Nigeria has come under further threat due to India’s drop in crude oil importation.

    Data from India’s Petroleum Planning and Analysis Cell showed that the country, which took over from the United States as Nigeria’s largest crude oil importer, reduced crude oil imports by $39.5 billion in April, compared to the same time the previous year.

    According to a report from Punch, the Indian High Commission in Nigeria said that India’s crude oil imports from Nigeria in 2020 amounted to $10.03 billion, representing 17% of Nigeria’s total crude exports for the year.

    India has been badly hit by a third wave of the coronavirus pandemic which led to a spike in infections in April and lockdown in major cities with the attendant negative effect on Nigeria’s oil sales.

    The NNPC was prompted to drop the official standard price of its main export streams, Bonny Light, Brass River, Erha, and Qua Iboe, by 61-62 cents per barrel, below its April 2021 prices. They traded at $0.9, $0.8, $0.65, $0.97 per barrel respectively, below international benchmarks, as Oilprice.com showed.

    India had been a major buyer of the not-too-light and not-too-heavy Nigerian crude that suited its refiners with the Indian Oil Corporation’s refineries reported to be operating at 95% capacity in April, down from 100%.

    An official at the IOC was quoted as saying, “If cases continue to rise and curbs are intensified, we may see cuts in refinery runs and lower demand after a month.”

    India reportedly bought more American and Canadian oil at the expense of Africa and the Middle East, reducing purchases from members of the Organisation of Petroleum Exporting Countries (OPEC) to around 2.86 million barrels per day.

    Bottom line

    This is not good news for Nigeria which is facing a serious revenue crisis as a result of a drop in crude oil receipts.

    The federal government is also being forced by the prevailing realities to consider cutting the cost of governance and reducing the salaries of government workers. The latter proposal has, however, been criticized by various stakeholders.

    A slump in crude oil demand from Nigeria’s major buyer will further worsen the economic crisis the country is facing having just marginally recovered from a recession in the last quarter of 2020.

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    Business News

    Oil market reacts as Colonial Pipeline cyber attack affects prices

    WTI oil futures are currently up by 1.34% (WoW) to $65.35 and the Brent oil futures are currently up by 1.87% (WoW) to $68.82.

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    Sequel to the cyber-attack that hit top U.S. fuel pipeline operator, Colonial Pipeline Co., the price of oil has started to improve. During the Asian session on Sunday, WTI oil opened at $65.52, representing a 0.95% gain from Friday’s $64.9, when the incident happened.

    WTI oil futures are currently up by 1.34% (WoW) to $65.35 and the Brent oil futures are currently up by 1.87% (WoW) to $68.82.

    Colonial Pipeline was forced to shut down its entire operation after the cyberattack. The company so far has given no timeline as to when the pipeline will begin its operation.

    “It’s an all-hands-on-deck effort right now… we are working closely with the company, state and local officials, to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions in supply,” U.S. Commerce Secretary, Gina Raimondo said.

    The pipeline is responsible for supplying nearly half of all the fuel consumed on the U.S. East Coast and provides refined products to more than 50 million Americans. Because of this, oil prices are likely to increase at several fuel distribution points, including Wilmington in North Carolina, Charleston in South Carolina, and Savannah in Georgia, Tank Tiger CEO, Ernie Barsamian told Bloomberg.

    The U.S. government has issued emergency legislation on Sunday, relaxing rules on the fuel being transported by road. The legislation allows for drivers in 18 states to work extra or more flexible hours when transporting refined petroleum products. The temporary waiver issued enables oil products to be shipped to as far as New York but there are worries that this may not be enough to cover demand. This indicates that the pipeline may not be fully operational for some time.

    The attack comes as the U.S. COVID-19 vaccination rate is improving. Americans are once again commuting to the office, planning major travel for the first time and booking flights. A prolonged disruption along the pipeline system threatens to send average U.S. gasoline prices above $3.00 a gallon for the first time since October 2014, further encouraging fears of inflation as commodity prices rally worldwide.

    In the meantime, fuel producers in the U.S. are weighing options for how to ship their products to the Northeast in case Colonial isn’t restored quickly. Traders and fuel shippers are seeking vessels to deliver gasoline that would have otherwise been shipped on the pipeline while others are securing tankers to temporarily store gasoline in the U.S. Gulf in the event of a prolonged shutdown.

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