Photo caption: Electricity facility
The Federal Government, through its Nigerian Electricity Regulatory Commission, has declared that it would spend about N2.4tn on power subsidies before the end of this year.
NERC’s Commissioner of Planning, Research, and Strategy, Dr Yusuf Ali, disclosed this at the PwC’s Annual Power and Utilities Roundtable, themed ‘Reigniting Hope in Nigeria’s Electric Power Sector,’ in Lagos on Thursday.
Ali explained that the subsidy had fluctuated due to foreign exchange challenges and tariff adjustments.
“As of November, the subsidy amount stood at N1.9tn, but with current trends, the monthly subsidy for electricity is expected to reach N260bn in December,” Ali stated.
He emphasised that the N2.4tn is an annual estimate that could adjust depending on the monthly cost-benefit tariff.
“Every month, we calculate the difference between the cost-reflective tariff and the approved tariff to determine the subsidy,” he explained.
Ali added that the government is expected to finalise the total subsidy figure by year-end based on actual consumption and tariff trends.
The Minister of Power, Adebayo Adelabu, who was represented by the Chief Technical Adviser to the Minister, Adedayo Olowoniyi, said, the Ministry of Power, in collaboration with PricewaterhouseCoopers, has developed a draft Integrated National Electricity Policy aimed at addressing critical challenges in Nigeria’s power sector.
Adelabu emphasised the importance of implementing cost-reflective tariffs to attract necessary investments and ensure the sector’s sustainability.
“We cannot dance around the fact that a market that does not create a line of sight of return for investors will not get investment,” Adelabu noted.
The minister further acknowledged the reluctance to adopt cost-reflective tariffs but argued that it is a necessary step for achieving 24-hour electricity and universal access.
He highlighted the administration’s efforts under the Renewed Hope Agenda, including the implementation of the Electricity Act of 2023 and the Presidential Power Initiative in partnership with Siemens.
Adelabu pointed out the challenges of vandalism, ageing infrastructure, and inefficiencies in the electricity value chain, which have hampered progress.
He revealed that the Transmission Company of Nigeria spent nearly N10bn in six months repairing vandalized towers.
“Our successes have not been without challenges. Frequent grid disturbances due to capacity inadequacies and consistent vandalism have impacted the sector,” he said.
He added that these initiatives focus on infrastructure development, such as building substations and upgrading transmission and distribution networks.
“PwC’s support has been instrumental in drafting the Integrated National Electricity Policy, which will guide the sector’s strategic implementation. The policy aims to foster market discipline, improve energy delivery efficiency, and ensure subsidies benefit the most vulnerable,” Adelabu stated.
He called for collective responsibility among stakeholders, stressing, “Hope is not passive.
“We must innovate and implement bold ideas to restore confidence and deliver a sustainable energy future for all Nigerians,” Adelabu added.
FG approves licence for 27,000 barrels refinery
The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has announced the approval of a licence for the construction of a new refinery.
The approval given to a company named Process Design and Development Limited is to establish and construct a new 27,000 barrels per day refinery.
It said the facility will be located in Dole-Wure, Akko area of Gombe State.
The authority in a post on its official X handle on Thursday, said, “Authority Chief Executive presented a Licence to Establish a 27,000 BPSD Refinery to the Managing Director/ CEO of Process Design and Development Limited.
“The refinery is to be located in Dole-Wure, Akko, Gombe State.”
The latest development signifies that Nigeria now officially has about 10 modular and regular refineries, adding to the nation’s refining capacity.
However, despite this increase in the number of refineries, most of them remain moribund, with many not functioning at full capacity or efficiently.
A background check using NG.Checks showed that the company is located in Kano with registration number 487883.
Its directors are Adamu U. Sanda, Abdulkadir Umar, Umar S. Umar and Bashir Umar.
Oil prices set to end week over 3% lower as supply risks ease
Oil prices fell on Friday, heading for a weekly drop of more than 3%, as concerns over supply risks from the Israel-Hezbollah conflict eased, alleviating earlier disruption fears.
Brent crude futures fell 55 cents, or 0.8%, to $72.73 a barrel by 0758 GMT. U.S. West Texas Intermediate crude futures were at $69.52, down 20 cents, or 0.3%, compared with Wednesday’s closing price.
On a weekly basis, Brent futures were down 3.3% and the U.S. WTI benchmark was trading 3.8% lower.
Israel and Lebanese armed group Hezbollah traded accusations on Thursday over alleged violations of their ceasefire that came into effect the day before. The deal had at first appeared to alleviate the potential for supply disruption from a broader conflict that had led to a risk premium for oil.
Oil supplies from the Middle East, though, have been largely unaffected during Israel’s parallel conflicts with Hezbollah in Lebanon and Hamas in Gaza.
OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, delayed its next policy meeting to Dec. 5 from Dec. 1 to avoid a scheduling conflict. OPEC+ is expected to further extend its production cuts at the meeting.
BMI, a unit of Fitch Solutions, downgraded its Brent price forecast on Friday to $76/bbl in 2025 from $78/bbl previously, citing a “bearish fundamental outlook, ongoing weakness in oil market sentiment and the downside pressure on prices we expect to accrue under Trump.”
“Although we expect the OPEC+ group will opt to roll-over the existing cuts into the new year, this will not be sufficient to fully erase the production glut we forecast for next year,” BMI analysts said in a note.
Also on Thursday, Russia struck Ukrainian energy facilities for the second time this month. ANZ analysts said the attack risked retaliation that could affect Russian oil supply.
Iran told a U.N. nuclear watchdog it would install more than 6,000 additional uranium-enriching centrifuges at its enrichment plants, a confidential report by the watchdog said on Thursday.
Analysts at Goldman Sachs have said Iranian supply could drop by as much as 1 million barrels per day in the first half of next year if Western powers tighten sanctions enforcement on its crude oil output. – Reuters
