Tales of woe on epileptic power supply, high tariff

Poor electricity generation and supply continued to draw condemnation from electricity consumers, reports SUCCESS NWOGU

The epileptic power supply and rising electricity tariff has triggered hardship and economic loss for Nigerians. The Manufacturers Association of Nigeria and the Independent Petroleum Marketers Association, among other groups and individuals, have denounced the resulting losses. For example, the weekend before last, parts of the country were plunged into darkness following a power outage..

IPMAN losses

Responding to the decline in electricity supply, Chairman of IPMAN, NNPC Depot Ore, Western Zone of Nigeria, Shina Amao, an engineer, said traders had suffered huge losses due to electrical epilepsy . He also deplored that electricity consumers are forced to pay for services they do not benefit from. Amao said, “It definitely has a negative impact on businesses. Many of us run on generators. This eats away at our profits deeply and as such we make no profit. The government does not give us volumes. We buy products from private depots at their price and not at the official price. “By doing so, we weren’t making much profit when the power supply was low. Now that it’s erratic, it’s worse. We use diesel and gasoline to run our generators to distribute our products to people.These increase our cost in the expense area and cause our staff to be laid off when we can’t make a profit.Some customers also become victims, when they buy more fuel, you see them complaining.

Corruption

“Government interventions in the electricity sector will only work when we are able to eliminate corruption from the system. Any intervention or solution will work if we eliminate corruption. Look at the issue of refineries in Nigeria, we have repaired and maintained our refineries and we are still spending so much money that we could have set up a new refinery. So we always talk about the issue of corruption. “The erratic power supply is detrimental to business productivity, growth and sustainability. If our profit happens to be 100%, we lose almost 60% of the available profit to electricity by using generators, buying diesel and gasoline. We are spending so much and the government is not helping us by not making the product available. We always buy products from third parties and private depots that sell for high prices and they will always tell us that is the price they can sell. We always let them know that the government has not raised the price. We buy from them from depot N158 and we always pay other expenses such as transport costs. We don’t make a profit. What little profit is taken away by other costs such as the cost of energy – diesel and gasoline.

Cost of doing business

In addition, the National Chairman, IPMAN, Alhaji Debo Ahmed, denounced the negative consequences of a reduction in electricity supply. He said this definitely affects the operations of IPMAN members, adding that when there is no electricity, the demand for stations using a diesel generator becomes very high. He added that diesel-powered stations need to power their equipment and sell gasoline to the burgeoning population. According to him, “it really affects most of our traders because if there is no electricity, they have to look for an alternative, which is diesel or petrol. And the high cost of operation is quite another thing. It’s all on the high side now, so it’s really affecting our marketers. »

MAN mourns losses

MAN Managing Director Mr Segun Ajayi-Kadir said Nigerian manufacturers spent more than N72 billion on alternative energy in 2021 following power outages. He lamented that the 72 billion naira had retarded their propensity for profit, job and wealth creation as well as their competitiveness. According to him, this non-competitiveness along with other challenges has delayed the propensity of manufacturers to enter the $1.3 billion continental market across 54 countries in Africa under the African Continental Free Trade Area (AfCFTA). ). The AfCFTA is a free trade area founded in 2018, with trade beginning on January 1, 2021. The AfCFTA was established by the African Continental Free Trade Agreement between 54 of the 55 countries of the African Union. The free trade area would be the largest in the world in terms of the number of participating countries since the establishment of the World Trade Organization. The agreement was brokered by the African Union. It was signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. The agreement initially requires members to remove tariffs on 90% of goods, allowing free access to basic goods , goods and services across the continent. The United Nations Economic Commission for Africa (UNECA) has estimated that the agreement will boost intra-African trade by 52% by 2022. The AfCFTA aims to accelerate intra-African trade and strengthen the trade position of Africa in the global marketplace by strengthening a common voice and political space in global trade negotiations. The Managing Director of MAN urged the Federal Government to boost the competitiveness of Nigerian manufacturers by increasing power generation and distribution.

FG Explanation

Explaining the reason for this, the Federal Ministry of Energy said the sharp drop in power generation in Nigeria seen over the penultimate weekend was due to a partial shutdown of the Obengas power plant in the Edo State. The Energy Minister’s special assistant on the media, Mallam Sanusi, explained that the Obengas plant had been closed for the repair of critical gas processing equipment. The ministry said the plant shutdown occurred while other gas sources are undergoing maintenance and capacity testing. He assured consumers that concerted efforts were being made to ensure the improvement of electricity generation and supply across the country. He pleaded for consumer understanding in the face of the current challenge.

TCN’s position

The Transmission Company of Nigeria (TCN) later explained that power generation rebounded on Sunday, June 5, 2022, after a significant decline recorded on Saturday. He said production improved by 12.9% on Sunday to 70,943.35 MWh from 62,837.51 MWh recorded on Saturday. TCN also said energy supply rose 12.9% to 69,886.65 MWh from 61,910.44 MWh recorded on Saturday. Electricity production and supply had fallen 15.7% on Saturday, falling to their lowest levels since April 9, 2022. In addition, the average energy production of 76,983.67 MWh between May 29 and on June 4, 2022, lower than the average of 86,336.55 MWh recorded in the previous week. The analyst observed that Nigeria’s power generation and supply fell further below the minimum of 105,000 MWh required to register some level of stability in power supply in the country.

Rate

A Lagos resident, Mr Declan Ikenna, lamented that there had been an increase in the electricity tariff, pointing out that he was charged N30,091.43 in May 2021 but charged N34,572 in May 2022. He noted that the fare increase was surprising as it did not match the supply. On Thursday, May 5, 2022, it was reported that NERC had approved that six electric distribution companies (DisCos) should increase their electricity rates. According to a document published on December 29, 2021 and signed by Sanusi Garba, President of NERC, and Musiliu Oseni, Vice President, the new tariff came into effect from February 2022. The increase would have been contained in the data presented by NERC in the 2022 Multi-Year Rate Order (MYTO) for certain distribution companies. The revision of tariffs would concern all categories of customers. In addition, customers in main demand areas were asked to pay N60.12 per kilowatt from N58.59, while customers in low demand areas were asked to pay N57.52 per kilowatt from from N55.87. The six DisCos approved by NERC for the rate increase are Ikeja Electricity Distribution Company (IKEDC); Port Harcourt Electricity Distribution Company (PHEDC), Jos Electricity Distribution Company (JEDC), Ibadan Electricity Distribution Company (IBEDC); Kano Electricity Distribution Company (KEDC) and Kaduna Electricity Distribution Company (KEDC). According to the NERC, some of the indices taken into account for the tariff increase are inflation, the price of gas, the exchange rate, the rate of inflation in the United States and the available production capacity. The regulator further stated that the indices would be reviewed every six months to update the tariffs with applicable index changes in accordance with the Multi-Year Tariff Order (MYTO). But the Nigerian Electricity Regulatory Commission (NERC) later explained that its recent reviews did not automatically translate into higher electricity tariffs. The clarification followed public outcry over recent reports of tariff increases by electricity distribution companies (DisCos). licensing revenue requirements’ published.’ The electricity market regulator said that where the impact of improved efficiency of operating parameters for individual licensees exceeds the impact of changes in macroeconomic parameters, end users could be reduced, as shown in some fare classes under MYTO 2022. the impact of improved operating metrics efficiency for individual licensees exceeded the impact of changes in macroeconomic metrics, users final rates may be reduced as outlined in certain fare classes under the Multi-Year Rate Order, MYTO 2022.”

The Commission further notified that, in accordance with the Electric Power Sector Reform Act (EPSRA) and other existing sector rules, it will initiate the July 2022 minor revision processes of the MYTO 2022 to consider changes in relevant macroeconomic indices, production capacity and CAPEX. necessary for the evacuation and distribution of the available production capacity in accordance with the rules in force.

last line

Inadequate attention to power supply by the government has crippled many manufacturing and small businesses in the country.

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