Oil & Energy

Environmentalist Wants FG To Stop Gas Flaring

Published

12 years ago

August 5, 2013

An environmentalist, Mr Surveyor Efik, has urged the Federal Government to mitigate the impact of climate change by stopping gas flaring.

Speaking with newsmen in Abuja, Efik, who is also the National Coordinator of Climate Change Network, an NGO, called for the formulation of a framework to stop gas flaring.

“The amount of associated gas that is being emitted or being flared since oil exploration and exploitation activities started is about 40 per cent of the total gas consumed in Africa.

“So, that amount of gas alone going to the atmosphere is contributing to greenhouse gas emission and for us to address it, I know Nigeria’s economy depends on oil and gas sector, this Petroleum Industry Bill, if well implemented, will address the issue of gas flaring seriously.

“It will hold these oil companies and bring them into order.

“Indonesia did that some few years ago; they started with regulating the oil industry activities with a legal framework, like we have put forward the Petroleum Industry Bill.

“All those oil companies, including Shell, which is also there in Indonesia, they are abiding by the laws and playing by the rules.’’

Efik also advised government to invest in climate change activities to mitigate its impact on the population.

He said such effort would encourage developed countries to support the nation’s climate change activities.

The coordinator said the National Adaptation Strategy and Plan of Action for Climate Change in Nigeria (NASPA-CCN) should be given financial backup to achieve the desired results.

He commended the Minister of Environment, Mrs Hadiza Mailafia, for developing the NASPA-CCN, which spells out the roles of all stakeholders regarding climate resilience adaptation in Nigeria.

Efik called on environment stakeholders to intensify awareness on the dangers of climate change.

“Let us create more awareness on the consequences, on the vulnerability; let people know how vulnerable Nigeria is; let them also know the consequential disaster that we might face if we don’t take precaution.

“If we carry out this advocacy, we’ll also make all the stakeholders that is the government stakeholders, the private sector stakeholders, the civil society stakeholders up to the communities, to know the roles they should play, the responsibilities they should take.

“So, if you and I play our roles, I think we will be able to overcome the future disastrous consequence that we might likely face, if we don’t do it today.’’

Efik also urged government to provide the required funding and undertake institutional reforms such as the creation of a Climate Change Commission.

Oil & Energy

States Can’t Slash Electricity Tariffs – NERC

Published

22 hours ago

July 28, 2025

The Tide

The Nigerian Electricity Regulatory Commission (NERC) has declared that state governments and their regulatory agencies lack the authority to unilaterally reduce electricity tariffs for power supplied from the national grid.

The Commission made its position known in a Public Notice titled “Application of Multiple Tariff Regimes in Nigerian Electricity Supply Industry (NESI)” on Thursday.

The notice came on the heels of the controversy over the Enugu Electricity Regulatory Commission (EERC) reduction of tariff for the Band A customers in its franchise areas from N209 per kWh to N160/kWh.

While operators in the NESI value chain such as the Electricity Distribution Companies (DisCos) and Electricity Generation Companies (GenCos), have condemned the downward review, EERC has based the rate of crash on the sufficiency of the Federal Government.

NERC and the utility providers in NESI have, however, expressed fears that the other states’ electricity commissions might toe the line of Enugu.

NERC stated, “As states do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licenses issued by the Commission, they must holistically incorporate the wholesale costs of grid supply to their states without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way of a subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission, and legacy financing costs in NESI.

“The Commission’s attention has been drawn to the increasing stakeholders’ concerns on the Tariff Order (Order No. EERC/2025/003) issued by the Enugu State Electricity Regulatory Commission to its Licensee Mainpower Electricity Distribution Limited (MEDL) that relies exclusively on electricity supply (generation and transmission) from the national grid.

“NESI stakeholders have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to NGN160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs, along with the financing costs for legacy obligations in NESI.

“It is pertinent to state that the NGN160.4 per kWh was arrived at largely by reducing the current average generation tariff of NGN112.60 per kWh to NGN45.75, with an assumption of a subsidy component, a difference of N66.85 per kWh.

“Section 34(1) of the EA places a statutory obligation on the Commission to create, promote, and preserve efficient electricity industry and market structures and ensure the optimal utilisation of resources for the provision of electricity, and we are also aware that EERC, as a sub-national electricity regulator, also has a similar statutory obligation in their enabling law, and neither NERC nor EERC, as responsible regulatory institutions, would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the Constitution.

“All stakeholders are advised to note that the Commission is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid and grants further assurances of its unwavering statutory commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.”

Oil & Energy

Tinubu Backs N4trn Bond To Resolve Power Sector Liabilities

Published

22 hours ago

July 28, 2025

The Tide

President Bola Ahmed Tinubu has given anticipatory approval for a N4 trillion bond initiative aimed at addressing the liquidity shortfall in Nigeria’s power sector.

Tinubu gave the approval during the meeting with representatives of the Association of Power Generation Companies (GenCos), led by former Niger State Governor, Col. Sani Bello (rtd), at the Presidential Villa, Abuja, weekend.

Special Adviser to the President on Energy, Ms. Olu Verheijen, who disclosed this to newsmen, said President Tinubu reaffirmed his administration’s commitment to resolving the financial challenges bedeviling the sector.

According to her, Tinubu acknowledged the historical liabilities inherited from previous administrations and assured the GenCos that his government would approach the issue with transparency and fairness.

Tinubu said, “I accept the assets and liabilities of my predecessors, and there is no question about that. But that acceptance must be on credible grounds.

“I need to wear the audit cap of verifiability, authenticity, and the fact that this inheritance is not a mere deodorant but a support structure for critical economic and industrial promotion.”

The President emphasised the need for patience from GENCOs and financial institutions, noting that government agencies are actively engaging audit and legal firms to scrutinise the claims.

“We are here. So, market it to your other colleagues. Give us time to do verification and validation of the numbers”, he said.

While reaffirming his belief in a market-driven electricity sector, the President said the industry’s long-neglected legacy issues are now receiving the attention they deserve.

“This is a longstanding issue that is now being dealt with. I know how much we have been able to save on fuel subsidies. We introduced the alternative, CNG, to bring relief back to the people”, the President stated.

Describing electricity as “the most important discovery of humanity in the last 1,000 years”, the President reaffirmed that access to electricity is fundamental to economic growth and human dignity.

The Special Adviser to the President, Ms. Verheijen, attributed the liquidity crisis to “a combination of unfunded tariff shortfalls and market shortfalls” that has built up over a decade.

She stated that as of April 2025, the Federal Government was carrying a verified exposure of N4 trillion in debts to GENCOs, an accumulation dating back to 2015.

“We have since sat with 27 GENCOs—not all of them are here today—and reviewed their PPAs and gas sales agreements to understand the legitimacy of their claims. The GENCOs claimed about N4 trillion from 2015 to the end of 2023″, she said.

According to her, the Nigerian Bulk Electricity Trading Company (NBET), the agency that contractually mediates between GENCOs and the government, has validated N1.8 trillion of these claims so far.

“Since that period, we have had N200 billion in unfunded subsidies that have accumulated the federal government’s liability.

“So, as of April 2025, the total exposure that we are carrying at the moment is N4 trillion”, she added.

Verheijen, however, cautioned that the figure remains subject to downward revision, pending final validation.

“While there is an anticipatory approval of this N4 trillion bond programme, it is subject to negotiations and final settlement of agreements. Only the amounts that the federal government validly owes are the things that will make it into the issuance by DMO”, she explained.

Oil & Energy

Oil Sector Slowdown’ll Threaten 2025 Budget Execution – NESG

Published

22 hours ago

July 28, 2025

The Tide

The Nigerian Economic Summit Group (NESG) has raised concerns over the persistent underperformance of the oil and gas sector, warning that it poses a significant threat to the effective implementation of the 2025 budget.

In its latest publication titled “NESG 2025Q1 GDP Alert”, the private sector-led think tank observed that Nigeria’s crude oil production in the first quarter of 2025 fell well below the government’s budget benchmark of 2.06 million barrels per day (mbpd).

This shortfall, the NESG warned, translates directly into lost oil revenues, which are critical to funding key government expenditures outlined in the budget.

“Persistent slowdown in the oil and gas sector poses a threat to the execution of the 2025 budget.

“In 2025Q1, the average crude oil production is significantly below the budget benchmark of 2.06mbpd, translating to lost oil revenues needed to implement the budget.

“This suggests the urgent need to resolve challenges facing domestic crude oil production, including ageing infrastructure, oil theft, pipeline vandalism, and kidnapping of expatriate workers”, the report stated.

The group commended the improvements in the refining sector’s performance in recent months.

“Persistent improvement in the Oil refining sector is remarkable”, NESG stated.

It, however, noted that there is a need to revive state-owned refineries to sustain the sector’s growth.

“The emergence of Dangote Refinery has been a game-changer for Nigeria’s oil and gas sector, reversing more than half a decade of contraction in the Oil refining sector and slashing import bills on petrol by about 53 percent (year-on-year) in 2025Q1.

“This suggests the need to support privately owned refineries and incentivise investments into the downstream oil and gas sector”, NESG noted.