…As Energy Economists say PMS should sell at N120/l
By Michael Eboh
The Vice President of Nigeria, Mr. Yemi Osinbajo, on Monday, lamented that the country does not have sufficient gas to fire the country’s power plants to generate up to 7,000 megawatts (MW) of electricity.
This was even as the President of the Nigerian Association for Energy Economics, NAEE, Mr. Wumi Iledare, stated that in line with the current realities in the global petroleum industry and the foreign exchange rate, the price of Premium Motor Spirit, PMS, also known as petrol, in the country should be about N120 per litre.
Osinbajo, who was speaking at the NAEE/International Association for Energy Economics, Annual International Conference 2016 in Abuja, expressed his disappointment in the fact that despite Nigeria’s enormous natural gas reserves of over 185 trillion cubic feet, the country is still faced with huge energy supply problems.
Osinbajo, who was represented by his Senior Special Assistant (Power and Privatisation), Chiedu Ugbo, said: “In fact, it is an irony, that we do not have sufficient gas to fire our power plants up to 7,000MW, yet in energy industry circles, Nigeria is described as more of a gas territory than an oil territory.”
He pointed out that presently, the country has over 12,500MW of installed electricity generating capacity, consisting of gas thermal and hydropower plants, stating of that capacity, about 7,000MW is available to be generated if the required fuel is available.
He, however, disclosed that in spite of the available capacity, power plants in the country, over the last couple of weeks, distributed less than 4,000MW of electricity to consumers across the country.
Osinbajo blamed the development on inadequate investment on gas facilities,gas flaring, inadequate gas infrastructure and vandalism among others.
He said, “We have limited gas molecules to supply to the power plants. This is a result of many years of under-investment in gas gathering and processing for domestic consumption and also many years of gas flaring. Nigeria alone flares about half of the 40 billion cubic meters of associated gas estimated to be flared in Africa annually.
To address the situation, Osinbajo disclosed that the Federal Government is aware that there is no alternative to electric energy for energizing and powering Nigeria’s economic growth and development; hence it is determined to resolve the challenges to achieving sustainable energy supply in the country.
“We are working tirelessly towards resolving the gas-to-power challenge, ensuring that the needed investment will be made in gas gathering and processing for domestic consumption especially for power plants and at the same time working to ensure sustainability of supply of existing gas volumes,” he noted.
Also speaking, Iledare stated that he does not see the low oil price as a disaster for Nigeria, stating that it offers the country the opportunity to adopt fiscal responsibility practices and reduce fiscal irresponsibility.
He further stated the low oil price allows the country to take advantage of the situation to allow prices in the sector to be determined at current international market price, while he recommended a PMS’ price of N120 per litre, stating that the Federal Government had no business regulating the sector.
He said managing the petroleum sector has become elusive, adding that regulators should be autonomous and any regulation put forward should have the backing of the law.
He warned that it is fool-hardy for the country to perpetually develop oil and gas resources for cash, instead of for the basis of satisfying the country’s energy needs.