Kerosene queue

Darkness persists as power generation remains low at 2,312 MWlOnly 13 20 plants generating power to national grid at below capacitylAPGC blames NBETlFG threatens to sanction depot owners selling above approved price

By Prince Okafor & Obas Esiedesa

ABUJA—Despite assurances by the Federal Government that the power supply situation in the country would improve, power generation remained low at 2,312MW over the weekend.

This is even as the price of Households Kerosine, HHK, also known as kerosene, increased by 41.4 percent to an average of N600 per litre, hitting the nation’s poor hard.

The product sold for less than N400 per litre two weeks ago, as the price of diesel and aviation fuel now hover around N800 per litre.

Checks by Vanguard showed as at 4pm yesterday, only 13 power plants were generating to the grid, with most operating below capacity. 

Azura-Edo topped the generation chart released by National System Operator, NSO, with 420MW.

Others were Geregu (Gas) 399MW; Jebba Hydro 334MW; Shiroro Hydro 292MW; Sapele NIPP 169.40MW; Omotosho (Gas) 121MW; Omotosho NIPP 102.50MWS;  Olorunsogo (gas) 108.30MW; Trans-Amadi 85.40MW; Afam IV & V 58MW; Ihovbor NIPP 103.60MW; Paras Energy 85.40MW and Omoku 46.50MW.

On the distribution end, data from NSO showed that Ibadan DisCo had the highest load allocation with 373.69MW followed by Abuja DisCo with 312MW. Others were Benin DisCo 244.17MW; Eko DisCo 205.43MW; Enugu 269.17MW; Ikeja DisCo 294.95MW; Jos DisCo 149.22MW; Kaduna DisCo 217.04MW; Port Harcourt DisCo176.35MW and Yola DisCo 94.94MW.

Commenting on the power generation situation, the Association of Power Generation Companies, APGC, blamed poor payments to the Generation Companies, GenCos, for the low generation to the grid.

Executive Secretary, APGC, Dr. Joy Ogaji, said it was critical that the Nigerian Bulk Electricity Trading Plc, NBET, paid the unutilized capacity charge to GenCos to enable them maintain their plants.

She said:  “The current practice of ignoring capacity component, presents a wrong signal to international and local investors, shatters/ negates the aim of the reform, and prejudices the GenCos’ ability to meet financial ratios imposed by the lenders, and certainly reduces /erodes the investors’ confidence in the reforms and returns.

“This practice also negates a key pillar of the Power Sector Recovery Program, approved by the Federal Executive Council, which seeks to establish a contract-based electricity market as it restricts and undermines the robustness of the electricity market.

“In addition, it can deflate the appetite or ability of investors to invest, with detrimental long- term effect of decreasing power plant financing options.  The Nigerian scenario represents an absurdity of sorts”.

But speaking to Vanguard, the Head Corporate Communication, NBET, Henrietta Ighomrore, explained that only GenCos with active gas supply agreement were paid for unused capacity, adding that  the five GenCos that currently meet that standard were being paid as at when due.

“On the issue of capacity payments, the contract documents are very clear on how it is treated. All GenCos get paid for the associated capacity on energy delivered to the national grid. Only GenCos with active PPAs get full capacity payment based on their active gas contracts.

“You are well aware that active gas contracts are associated with the take and pay obligations, which come with more financial exposure and responsibilities. Nonetheless, the Regulator, NERC, has set in motion the process for partial activation of contracts in the sector, which was what necessitated the scheduled capacity test by NBET to various thermal plants around the country.

“Although, we were not able to record full participation of all GenCos, as some were either not able or showed willingness. With a better understanding of the intent, we expect full cooperation of GenCos in subsequent capacity test of their plants. 

”It is important to ascertain the actual capacity of our generation network to enable better planning and efficient dispatch of power within the grid network,” she stated.

Meanwhile, despite interventions from the federal government, the price of Households Kerosine, HHK, also known as kerosene, has increased by 41.4 percent to an average of N600 per litre.

This development has, indeed, affected most households, especially those leaving in rural communities, as the product is their major  source of fuel for cooking.

For instance, a survey conducted by Vanguard showed that parts of Anambra, Kano, Abia, Kaduna, Ebonyi, Ogun, Cross River, where the product was sold below N400 per litre in January 2022, now sells above N600 per litre.

No local production

Findings also showed that the Nigerian National Petroleum Company Limited, NNPC, did not produce any white product (PMS and DPK) in February, and apparently for the past twelve consecutive months.

This, according to the company, is due to ongoing rehabilitation works on the nation’s four refineries.

NBS report

However, the National Bureau of Statistics, NBS, in its National Household Kerosene Price Watch, for February 2022, stated:  “The average retail price per litre of Household Kerosene, HHK, paid by consumers in February 2022 stood at ?450.66 from ?437.11 in January 2022, showing an increase of 3.10 percent on month-on-month.

“On a year-on-year comparison, the average price increased by 26.66 percent from ?355.80 in February 2021.”

While Ebonyi, Cross River and Osun states recorded the highest average price per litre in February 2022 at N607.14 N593.75 and N531.77 respectively. Bayelsa, Jigawa and Sokoto recorded the lowest average price per litre at 290.44, N326.39 and N340.14 respectively.

The report further noted:  “The average price per gallon of Household Kerosene paid by consumers increased to ?1559.78 in February 2022 from ?1528.74 in January 2022, indicating an increase in average retail price by 2.03 percent on month-on-month.

“The year-on-year average price per gallon of kerosene increased by 28.46 percent from ?1214.24 in February 2021.

“Enugu state had the highest average retail price with ?1935.95 followed by Jigawa with ?1934.62 and Rivers, ?1828.89. Similarly, Adamawa state recorded the lowest price with ?900.00 followed by Yobe and Borno with ?1210,00 and ?1240.00, respectively.”

FG intervenes

Meanwhile, the federal government has threatened to sanction depot owners caught selling petroleum products beyond the approved ex-depot price in the country.

The Minister of State, Petroleum Resources, Timipre Sylva, while briefing newsmen weekend, noted that efforts were ongoing to resolve the energy crisis in the country.

“We are aware, just like President Muhammadu Buhari said in a statement, that there are some depot owners who are taking advantage of the situation by increasing the ex-depot price.

“I can assure you that there will be sanctions for any of those depots that continue to increase the ex-depot price as approved. We are going to deal decisively with anyone who tries to take advantage of this situation.

“It has been a difficult few weeks.  A few weeks ago, we had issue of petroleum product shortage. I have already addressed that matter which coincided with the geopolitical tension in Ukraine and Russia.

“Prices of crude oil went up exponentially beyond levels expected. As you all know, when crude oil prices rise to that level, it can also affect the derivatives of crude oil.

“Nigerians are suffering because of the high diesel prices, including everywhere else globally.  This is not peculiar to us at all. Diesel is a deregulated product and, therefore, when the prices go up internationally it affects the price also in Nigeria,” he said.


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