The Nation Newspaper

Tag: supply

  • Fed Govt inaugurates committee for fuel supply

    The  Federal Government has set up a committee to provide a framework for the importation and supply of petroleum products, the National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, has said.

    He said the committee comprised officials of the Ministry of Petroleum Resources, Nigerian National Petroleum Corporation (NNPC) and its depots, privately-owned depots, Major Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and relevant stakeholders.

    He told The Nation, that  the committee was to  provide modalities for fuel distribution nationwide.

    Others are: ensuring that marketers comply with the fuel pump price of N145 per litre, obedience to the laws guiding the importation of fuel, and hoarding of fuel, among others.

    According to him, the government is aware of the problems any attempt to increase the price of fuel will cause, and decided to step in to nip them in the bud.

    Okoronkwo said: “The government is keenly interested in ensuring uninterrupted supply of fuel in the country. This is the reason behind the decision of the government to set up a committee that would oversee the supply of fuel in the country. As things are, the government wants to keep to the rules guiding the supply of fuel, and also expected stakeholders including the marketers to do the same thing.”

    On the Direct Sale and Direct Purchase (DSDP) import model, Okoronkwo said the government did not make reference to the model, while setting up the committee.

    “The government did not state categorically whether the committee will be involved in the DSDP import model introduced to enable crude oil refiners abroad process the country’s crude oil into petrol and other petroleum products and further bring them to Nigeria. We are watching the events as they unfold by the government. Let us wait and see, whether there will be alternative to the model or not,” he added.

    He said IPMAN was ready to support any policy capable of improving the supply of fuel nationwide.

    The IPMAN chief said marketers were in between the government and the masses on issues relating to fuel importation and supply and had no reason other than to comply with the directives of the government on such matters.

  • ‘Hydro plants improve power supply’

    Improved power supply in the past three weeks, especially in some parts of Lagos State, was not as a result of the closure of industrial concerns during the festive periods. It was due to increased output by hydro power plants and reduced gas pipelines vandalism, it was learnt yesterday.

    The Executive Secretary of the Association of Power Generation Companies (APGC), Dr Joy Ogaji, told The Nation that the hydro power plants were made to produce more during the festive periods to boost supply. According to her, the hydro power plants had to abandon their water management plan set for January to December to achieve this target.

    She said power production from the hydro plants is planned in such a way that outputs are higher during rainy season when water levels are high and lower during dry season but because of the Yuletide, the hydro plants have to produce more this time even when they didn’t have enough water. This is to show the commitment of power generation companies to ensuring stable power supply, she added.

    Ogaji, however, expressed fear that the current improvement in power supply may not be sustainable because the hydro plants are overshooting their production limit, which may not persist for long. She noted that the thermal plants were also over-stretching their capacities to ensure that output is substantial.

    To her, generation companies (GenCos) are burdened by huge debt of over N460 billion, which has made it difficult for them to maintain the machines and buy gas. Some of the power plants have been shut down because of lack of money to buy gas, while some plants were shut down because the pipelines that supply gas to them are undergoing repairs, she said.

    According to her,  about 50 per cent of the N460 billion are meant for the gas suppliers, the reason gas suppliers are disinterested and uncommitted to their gas supply obligations. She added that the federal government according to media reports said it has plans underway to pay the debt but noted that APGC has not received any formal letter to that effect and currently has not involved APGC in the plan. But based on the report about government’s plan to pay the debt, the generation companies are optimizing output from thermal power plants while also putting pressure on the hydro plants. To prevent the power sector from collapse, government should intervene in payment of the debt, she added.

    The General Manager, Corporate Communications of Eko Electricity Distribution Company, Godwin Sule Idemudia, confirmed there was improvement in supply.

     

     

  • IPMAN: Investment in refineries ‘ll boost fuel supply

    The Federal Government’s move to woo foreign companies to set up refineries in Nigeria will improve distribution of petroleum   products, Independent Petroleum Marketers Association of Nigeria (IPMAN) National Chairman Chief Chinedu Okoronkwo has said.

    The Minister of State for Petroleum Resources, Dr Emmanuel Kachikwu, at a stakeholders’ forum in Abuja, invited investors  to  set up refineries in Nigeria.

    To Okoronkwo,  that  would help  grow the downstream segment of the petroleum industry. He said:“Plans by the Federal Government to welcome foreign investors wishing to invest in refineries in Nigeria is a good one. ‘’Such investment is capable of improving activities in the downstream sub-sector. Apart from the fact that the initiative would boost supply of fuel, it would help both independent and major marketers to expand their operation by opening up more outlets in the country.”

    He said the industry is grappling with problems of refining and supplying fuel to end users, adding that the problems would be addressed once crude oil is refined maximally in the country.

    He stated that many people have lost their jobs due to problems such as fall in oil price, oil theft and other untoward practices in the country. He noted that more jobs would be created if such refineries are built in Nigeria.

    According to him, local and foreign-owned refineries would create opportunities for people who wish to work in the refineries, depots, retail outlets and others. The idea would also provide materials for petrochemical industries especially those that are producing water tanks, plastic chairs, slippers, orthodox drugs and others, he said.

    ‘’The issue of allowing foreigners to own refineries as proposed by the Federal Government comes with a lot of benefits. Stakeholders in the value chain will benefit from it in one way or the other. Of note is that marketers will record more profits, which when ploughed back into the system, would improve activities in the downstream segment of the oil industry,’’ he added.

    Okoronkwo advised the government to fast-track the process of bringing companies that will refine crude oil in Nigeria, adding that the initiative would help in reviving the oil industry.

    The former President, International Association of Energy Economists (IAEE), Prof Adeola Akinnisiju, said the more firms that refine crude in Nigeria, the better for the downstream and the economy.

    He said the economy would improve once there is uninterrupted fuel supply in Nigeria, stressing that the economies are doing well abroad because they grow their oil and gas sector well.

    Nigeria’s Dangote refinery, however, will kick off production in 2018. The refinery has an initial production capacity of 450,000 barrels per day, and remains the biggest privately owned refinery to have such capacity in West Africa.

  • Fed Govt invites World Bank, others for power supply

    To boost power supply, the Federal Government has invited World Bank, International Monetary Fund (IMF), African Development Bank (AfDB), United States Agency for International Development (USAID) and others, which have huge portfolios and interests, to invest in energy.

    The government is seeking investment in power generation, distribution and transmission.

    The Minister of Power, Works and Housing, Mr. Babatunde Fashola, made this known during a panel discussion at the 5th European Union- Nigeria Business Forum at the Eko Hotel, Lagos.

    He said the funding gap in the sector was wide and required investments to improve electricity supply and the economy.

    In his keynote address entitled Financing the power sector, Fashola said the sector has huge investible propositions, which only bigger corporations have the capacity to meet, adding that the sector has the capacity to provide returns on investment for any company that invests in it.

    He said the government was striving to provide an enabling environment through its policies to guarantee adequate returns on investment.

    Fashola said: “Without doubt, bad environment is a problem, which the government is trying to address. It is obvious that the power sector has huge potential, which can only be realised with the right environment.

    “When one considers that the sector is broken into 11 power distribution companies (DisCos) and six power generation companies (GenCos), one would see that there is huge potential in the industry. This is the reason the Federal Government is asking investors, especially global financial institutions, to invest in the sector.”

    The Head, Economic Cooperation and Energy Section, European Union, Mr. Juan Casla, said power sector was crucial to the growth of any nation, urging the Federal Government to put in place measures that would foster its growth.

     

  • NLNG moves to ease cooking gas supply

    NLNG moves to ease cooking gas supply

    To make the supply of liquefied petroleum gas (LPG) or cooking gas easy, the Nigeria Liquefied Natural Gas Limited (NLNG) and the international auditing firm, KPMG have carried out studies to find out what makes supply of the commodity cumbersome in the country, The Nation has learnt.

    NLNG’s immediate past Managing Director, and Vice President, Safety and Environment (S&E), Shell Upstream International Leadership Team, Babs Omotowa, told The Nation that the studies have been completed and that the gas company was working with the government to remove all bottlenecks to make the commodity readily available in the country.

    Omotowa said the Nigeria LNG carried out study on the issue and hired KPMG last year to carry out its own study, adding that the auditing firm has submitted its findings, which are currently being worked on.

    He said: “At NLNG, we have carried out a study, we also appointed KPMG late last year to carry out a study on what needs to be done to unblock all of these challenges and they have submitted their report. We have also engaged with the Vice President’s Office and we are working with the VP’s office around how the government will take the lead on unblocking all these issues and the private sector will also make an investment.”

    The Liquefied Petroleum Gas Retailers (LPGAR) had accused a cabal that hijacked the LPG business in Nigeria for being responsible for the problems in the LPG subsector.

    LPGAR National Chairman, Mr. Michael Umudu, told The Nation that the LPG business has been hijacked by a cabal. The hijack, according to him, accounted for   the price of the commodity rising from N2.3 million to N4.3 million for 20 tonne, and the cost of filling a 12.5-kilogramme cylinder from N2,500 to N4,000.

    Umudu said: “I am not here to mention names, but we all know that NLNG appointed a selected number of firms to receive and market the product. They should explain to us the factors that brought us to this precarious situation. They (off-takers) should explain to LPG stakeholders, the government and the consumers what happened. We worked together to persuade the government to intervene when the sector was almost dead in 2007.”

    But Omotowa noted that the major problem in LPG supply is infrastructure deficit. “I think the challenge in LPG is one around infrastructure. We need as a country to build more receiving terminals. The only two terminals we have in Lagos are not enough. We have to build more terminals in Port Harcourt and Calabar. We have to invest in transportation of LPG from those terminals into the country either by rail or by trucks. We have to ensure as a country that we have enough distribution centres across the country. So, there is quite a lot of infrastructure work that needs to be done.

    “At NLNG, we are not aware of any cabal, we do not subscribe to any cabal. We supply to any terminal that is available. We are encouraging any person, who is able to invest in any other terminal to invest so that the product can be made available. We are working with the government both the executive and the legislature on actually how to unblock all the challenges across the entire value chain so that LPG is available not just in Lagos, but in Sokoto, Kano and Kaduna so that the issues around deforestation and people chopping trees can reduce and health and environmental concerns of people in those areas can be further improved.”

  • Contractors decry Navy’s refusal to pay N32m for supply

    Some contractors engaged by the the Nigerian Navy Secondary School (NNSS) at Ojo, Lagos State, to supply building materials worth over N30 million have faulted the school’s alleged refusal to pay them.

    The contractors, who were represented by officials of Albert Matilda Limited and a contractor, Mr Idowu Adeniyi, said they were engaged to supply gravel, sand and sand-fill to build a sport complex for the school.

    They said efforts to pay them resulted in death threats from Navy officials.

    The contractors urged the naval authorities to investigate alleged fraud against the NNSS management.

    They also said they were issued dud cheques of over N31 million.

    The contractors recalled that last year when the school authorities gave out Local Purchasing Orders (LPOs) to some contractors to supply building materials, Hambal Global Resources Limited, a company allegedly jointly owned by an NNSS official, was among the bidders.

    One of the LPOs given to Albert Matilda Limited, dated March, 2, 2015, showed that a contract of N18.2 million to supply building materials was awarded to the company and others.

    They said building materials worth millions of naira were supplied to actualise the contract.

    According to them, rather than pay the money due to the contractors, the school authorities, represented by Deputy Commandant, Lt.-Com Sule Abdu, allegedly diverted it.

    It was gathered that Mrs Mariam Abdu, wife of NNSS deputy commandant, executed an undertaking on behalf of Hamebal Global Resources Limited to pay N13 million as “down-payment, being the 70 per cent of the N18,200,000 to be paid by March 27, 2015”.

    But after it reportedly failed, Abdu, according to the contractors and the contract documents, also executed another Memorandum of Understanding (MoU), dated April, 18, 2015, where he was said to have promised “to pay (Albert Matilda Limited) …N18 million as the full contract sum on or before Friday, May 8, 2015, whereas no such undertaking was made for Mr. Idowu Adeniyi”.

    But none of the undertakings was reportedly executed.

    The contractors said instead of paying them, the company issued several cheques, totalling N32.4 million, in various amounts to the contractors but were not honoured eventually.

    In the petition by their lawyer, Femi Falana and Co., addressed to the minister of Defence and copied to Cmr Bala Sule, the petitioners urged the minister to investigate the award of contract and the alleged dud cheques by Abdu.

    The law firm warned that it might petition the anti-graft agencies, if those copied failed to take action.

    Abdu said there were efforts to pay the contractors, adding that the school was handicapped by circumstances beyond its control.

    He called for a meeting with Falana to resolve the matter.

     

  • Discos not to blame for poor power supply

    Recently in Kenya, there was a blackout for four  hours and its  people wondered what   happened.

    Later, the power generating firm KenGen in a statement, blamed  a monkey, which tripped on an equipment in an hydro power  plant for the problem.

    The generation company (GenCo) said though the monkey survived, Kenya lost 183megawatts (Mw)  during the blackout. It apologised to consumers, promising to secure its facilities from  such hazards in future.

    I  can’t help admiring the way  the  firm handled the matter efficiently. Of  course most Nigerians will argue that the power supply in Kenya is not compared with  that of Nigeria because it is erratic here and blackouts are more.

    I agree with them.  This is because  the Kenyan  power firm has been allowed to do its public relations without  any pressure and without  any  ‘monkey’ tricks  or  interference from any  quarters  on the source  of  power  failure.

    In  Nigeria, however,  the way  blackouts  are  explained is different. The  culprits are  the distribution companies (Discos) that deliver electricity to our homes and companies.

    This has been reinforced by the   hostile  attitude of the trade unions in the power sector in that they mobilised consumers against the discos. Take the case of when tariffs were approved for the discos by the Nigerian Electricity Regulatory Commissionwere announced early  this year.

    The unions instigated even  the Senate  to stop  the tariffs hike and  NERC went  to  court  to accuse the Senate of usurping  its  legitimate  function as the regulator  of electricity. The unions  did  not  stop there; they asked workers to go on strike on the new  electricity  tariffs as if it is  the same thing with the fuel price increase to N145 on which  they called out workers on strike recently.

    This  is  despite  that discos don’t  generate or transmit electricity,  but  only  deliver  to  consumers  when it is   is available.

    Stakeholders in the electricity  industry include the Nigerian  Electricity Bulk  Trading  Company, gencos, discos  and transmission  companies. How come then that the union  leaders are always  pointing fingers at  the  discos when  there is a power  failure?  As  the  Kenyan  example  has  shown, it was  a genco  that explained  what  happened, not a disco.

    In  Nigeria, it  is true that pipeline vandalism  has  reduced  the generation and transmission of electricity  not  to  talk of distribution, which is the responsibility  of the discos.  But,  then,  can  the  discos  distribute  what  they  don’t  have?

    True, the gencos cannot generate power  when they don’t  have the  basic  ingredients to  do so and even  when  sources  of  such  generation  have  been rendered  unproductive  or inactive  by  vandals.  In  Kenya,  the  genco  was  lucky  that it was a  monkey that  cut  power  for hours  only.

    It  is  an army  of vandals  that  are stalling electricity production daily    and  they have  even  metamorphosed into  a virile terrorist group  called  the Avengers  of the Niger  Delta  who  are daring   and taxing  the  federal    might.

    That really is the core  of the matter  and  that  is what the unions should  focus on as the cause of irregular electricity supply.

    Therefore,  the  discos,  which  are  at  the receiving end  of the poor electricity supply chain,  should  not  be blamed  by  the  unions.

     

    • Aliu, an analyst, writes from Kano

  • Blame game in power supply

    Sir: In Kenya recently, there was a blackout across the nation for four hoursand people wondered what had happened, but not for long. The  power generating company   KenGen  issued  a statement  that a monkey  had  accidentally  tripped an equipment  in a  hydro  power  plant  which triggered  the nationwide  blackout. The  generation companyexplained that Kenya lost 183 MW  during  the  blackout and  apologized to  consumers and  promised  to secure its facilities from  future  power  hazards that  can  cause  unexpected  blackouts .

    In Nigeria however, theway blackouts are explainedis completely different. The  regular  culprit  in the  public  mind are  the discos – the distribution companies  that deliver electricity  to  our homes  and companies  and bring in the electricity  bills  for  consumers  to  pay. This has  been reinforced  by the   hostile  attitude  of  the trade unions  in the power  sector in the way  they  mobilized consumers  against  the discos  when  tariffs  for  electricity  approved  for  them  by the regulator, the Nigerian  Electricity  Regulatory  Commission,were announced early  this year. The  unions  went  all  the way to instigate even  the Senate  to stop  the tariff increase after which  NERC  went  to  court  charging the Senate  of usurping  its  function as the regulator  of electricity  sector. The unions did not stop there;they asked workers to go on strike on the new tariffs.

    As  the  Kenyan  example  has  shown, it was  a generating company (Genco)that explained  what  happened  and  not  a distribution company (Disco). It is a  well-known  fact  that  Discos don’t  generate or  transmit electricity  but  only  deliver  to  consumers as and  when  power is available  and  bill  such  consumers  for  electricity  supplied  and  utilized. How   come  then  that  the Nigerian  union  leaders are always  pointing accusing  fingers at  the  discos whenever  there is power  failure?

    In   Nigeria,pipeline vandalisation nationwide has drastically reduced  the generation and  transmission  of electricity  not  to  talk of  distribution of  electricity  which  is the responsibility  of the discos.  But  then  can  the  discos  distribute  what  they  don’t  have ? Definitely not? Similarly, the  gencos  cannot generate  when they don’t  have the  basic  ingredients to  generate  when  sources  of  such  generation  have  been rendered  inactive  by  vandals.  In  Kenya,  the  KenGen  was  lucky  that  it was a  monkey  that  cut  power  for four hours  only. In  Nigeria, it  is  an army  of vandals  that  are stalling electricity production  on a daily  and  consistent  basis and  they have  even  metamorphosed into  a virile  terrorist  group  called  the Avengers  of  the Niger  Delta who  are  daring and tasking the might  of  the  federal government.  That  really  is the core  of the matter  and  that  is what  the unions should  focus on as the cause  of irregular electricity  supply  and  not  the  discos  which  are  at  the receiving end  of the poor  electricity  supply  chain.

     

    • Ibrahim Aliu,

    Kano.

  • NACCIMA decries epileptic power supply

    NACCIMA decries epileptic power supply

    The Association of Chamber of Commerce Industry, Mines and Agriculture (NACCIMA) has decried poor electricity supply in the country, especially to the manufacturing sector.

    NACCIMA President Mr. Bassey Edem said the positive outlook of the energy sector early in the year could not be sustained, as power generation has continued to drop in the last three months.

    He spoke to The Nation in Lagos on challenges facing the Organised Private Sector (OPS), which has resulted in lack of capacity utilisation. He condemned the vandalisation of pipelines, which has hampered the supply of gas to the power plants.

    Edem advised the government to improve alternative and renewable energy sources for power generation to overcome the challenges. He said: “It is about time the government considered decentralising power transmission.

    “It is also important for investors in the power sector to ensure that consumers get value for money, while efforts are intensified on the distribution of pre-paid meters. The recent signing of power purchase agreement by the Federal Government and 14 solar energy firms is a welcome development.”

    The NACCIMA president urged the government to ensure strict adherence to the timeline in the agreement, so that within the shortest possible period there would be an improvement in power supply in the country, while they continue to work towards achieving the 30, 000 Megawatt (MW) target to meet the needs of every sector of the conomy.

    Bassey also called on the government to put in place measures that will address the immediate negative impacts of the new Foreign Exchange policy. He also asked that commitments and outstanding Letters of Credit (LCs) by importers with naira cash backings, that were billed at the new exchange rate to the importer, be retained at the rate with which the form ‘Ms’ were issued.

    He said in the alternative, the Central Bank of Nigeria (CBN) should introduce a form of palliative measure to reduce the resultant loss incurred by importers.

    According to him, the quest to attract Foreign Direct Investment (FDI) can only materialise  when foreigners see the prosperity of indigenous companies. He said the unhealthy business environment has led to the relocation of many companies, especially the multinationals, who have gone to other African countries to set up their businesses.

    Bassey criticised some of the economic policies of the government, especially with Diaspora remittances, which he said may be difficult to recover by those who sent them as a result of the not so clear and inconsistent Forex policy.

    On Economic Partnership Agreement (EPA), the NACCIMA boss argued that although it is a good concept, local manufacturers have not developed to a level that can accommodate the agreememnt. He said: “Overseas countries are not aware of the challenges of power and the crisis of poor infrastructure provision in all its ramifications. Putting all that into consideration, we cannot support EPA now as the ratification will make us uncompetitive”.

    The NACCIMA boss also berated the Federal Government over the non inclusion of members of the private sector in the economic team. He wondered how the peculiar challenges facing the private sector can be adequately addressed when they are neglected in such an important group.

  • Discos not to blame for poor power supply

    Recently in Kenya, there was a blackout for four  hours and its  people wondered what   happened.

    Later, the power generating company KenGen issued a statement, blaming  a monkey which tripped on an equipment in an hydro power  plant for the problem.

    The generation company (GenCo) said though the monkey survived, Kenya lost 183megawatts (Mw)  during  the blackout. It apologised to consumers, promising to secure its facilities from  such hazards in future.

    I  can’t help admiring the way  the  firm handled the matter efficiently. Of  course most Nigerians will argue that the power supply in Kenya is not compared with  that of Nigeria because it is erratic here and blackouts are more.

    I agree with them.  This is because  the Kenyan  power firm has been allowed to do its public relations without  any pressure and without  any  ‘monkey’ tricks  or  interference from any  quarters  on the source  of  power  failure.

    In  Nigeria, however,  the way  blackouts  are  explained is different.The  culprits are  the distribution companies (Discos) that deliver electricity to our homes and companies.

    This has been reinforced by the   hostile  attitude of the trade unions in the power sector in that they mobilised consumers against the discos. Take the case of when tariffs were approved for the discos by the Nigerian Electricity Regulatory Commissionwere announced early  this year.

    The unions instigated even  the Senate  to stop  the tariffs hike and  NERC went  to  court  to accuse the Senate of usurping  its  legitimate  function as the regulator  of electricity. The unions  did  not  stop there; they asked workers to go on strike on the new  electricity  tariffs as if it is  the same thing with the fuel price increase  to N145 on which  they called out workers on strike recently.

    This  is  despite  that discos don’t  generate or transmit electricity,  but  only  deliver  to  consumers  when it is   is available.

    Stakeholders in the electricity  industry include the Nigerian  Electricity Bulk  Trading  Company, gencos, discos  and transmission  companies. How come then that the union  leaders are always  pointing fingers at  the  discos when  there is a power  failure?  As  the  Kenyan  example  has  shown, it was  a genco  that explained  what  happened, not a disco.

    In  Nigeria, it  is true that pipeline vandalism  has  reduced  the generation and transmission of electricity  not  to  talk of distribution, which is the responsibility  of the discos.  But,  then,  can  the  discos  distribute  what  they  don’t  have?

    True, the gencos cannot generate power  when they don’t  have the  basic  ingredients to  do so and even  when  sources  of  such  generation  have  been rendered  unproductive  or inactive  by  vandals.  In  Kenya,  the  genco  was  lucky  that it was a  monkey that  cut  power  for hours  only.

    It  is  an army  of vandals  that  are stalling electricity production daily    and  they have  even  metamorphosed into  a virile terrorist group  called  the Avengers  of the Niger  Delta  who  are daring   and taxing  the  federal    might.

    That really is the core  of the matter  and  that  is what the unions should  focus on as the cause of irregular electricity supply.

    Therefore,  the  discos,  which  are  at  the receiving end  of the poor electricity supply chain,  should  not  be blamed  by  the  unions.

     

    • Aliu, an analyst, writes from Kano