DisCos seek FG’s intervention on gas pricing for power generation

0
58

Electricity Distribution Companies (DisCos) have appealed to the Federal Government to intervene in gas pricing for power generation to ensure effective service delivery. 

Mr Sunday Oduntan, the Executive Director Research and Advocacy, Association of Nigerian Electricity Distributors (ANED),   made the call in a statement in Abuja on Saturday.

Oduntan said that the cost of gas remained one of the key determinants of the electricity tariff in Nigeria, adding that it is high time the government found a way to helping bring down the price in the interest of the sustainability of the power sector.

RELATED NEW:New gas project to boost Nigeria’s LPG supply from 96 flaring sites – Stakeholders

“Most of Nigeria’s power generating plants are thermal plants. They use gas as their fuel and as long as the price of gas is high, the cost of generation – and the eventual tariff to the end user – will also be high.

“At present, the energy generation mix is around 80 per cent  thermal and 20 per cent hydro.

“Moreso, the cost of gas is also affected by fluctuations in Foriegn Exchange (Forex). So while the cost of gas and generation will rise due to forex fluctuations, the tariff is fixed in Naira and may not account for this difference.

READ ALSO: Enugu Govt. approves construction of PHC centers in seven LGAs

“Especially because of the absence of a commitment to adhering to periodic tariff reviews,” he said.

Oduntan said that as at today, the price of gas for local power production was a little over three dollars for one million British Thermal Units (mmbtu), whereas the cost at which LNG was exporting gas was less than half the same amount.

He said that some International Gas Companies (IOCs) were still flaring much-needed gas into the atmosphere, and that there were several options available to the government to make electricity more affordable.

“This cost of gas presently accounts for almost 70 per cent of all the input the plants utilise to generate power.

“Except we begin to consider solutions from that angle, we may not make much headway in providing the cheap electricity Nigerians need to move the country to an industrial giant,” he said.

Oduntan noted that the absence of a market-reflective tariff had continued to bedevil the sector and had contributed majorly to much of the N1.5 trillion liquidity gap in the sector.

He said that with effect from July 1, a new performance-driven increased tariff structure would be implemented as a step towards narrowing the liquidity gap.

“If the cost of the major input in any production process is reduced, it will have a ripple effect across the entire chain.

Watch Leakblast TV channel from around the world

“That is what we are advocating for. It will be in the interest of the end users and by implication, the Nigerian economy as a whole,” he said.

Thanks for Reading via the most updated news portal

About Leakblast.com

Share your story with us

Advertise With us

Encourage & Support LeakBlast

Feel free to contact us

Call Us:+234(0)9073726403
Get us on Whatsapp: +234(0)8181166425      
Email Us: editors@leakblast.com

SUPPORT LEAKBLAST JOURNALISM OF INTEGRITY AND CREDIBILITY

Good  journalism costs a lot of money.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble Endeavor.

By contributing to LeakBlast, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.

Support LeakBlast

LEAVE A REPLY

Please enter your comment!
Please enter your name here