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TCN’s Ineptitude Costs 11 Discos Lose N1bn Monthly – ANED

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Kano

The 11 electricity distributions companies (Discos) in Nigeria’s power sector on Wednesday alleged that the inability of the Transmission Company of Nigeria (TCN) to wheel maximum generated electricity to their respective networks was costing them a monthly revenue of N1 billion.

The Discos spoke through their platform, the Association of Nigerian Electricity Distributors (ANED) in response to TCN’s recent claims that the Discos and not it was the weakest link in the country’s electricity value-chain.

Their claim of TCN’s operational ineptitude was contained in a statement from the Executive Director, Research and Advocacy of ANED, Mr. Sunday Oduntan in Abuja.

ANED said the TCN still had the unholy character of defunct and hugely corrupt Power Holding Company of Nigeria (PHCN), adding that the company has not been able to guarantee its members mostly in the north stable power supply.

It explained that the Discos as alleged by TCN, could not be rejecting power or load-shedding their customers because the economics of their tariff was built on improved power distribution and consequent revenue collection.

It also noted that TCN’s plan to execute 22 transmission projects and improve their willing capacity to above 6000 megawatts (MW) within 2016 was doubtful given that the country was already within the fourth quarter of its financial year and no tangible fund has been given to the TCN for the projects by the government.

“It is unfortunate that the new management of TCN, with the departure of Manitoba Hydro, rather than reach out, in partnership, to work with the other stakeholders of the sector, is more interested in pointing fingers and playing the blame game.

“No matter how TCN wants to play it to color the reality of transmission shortcomings, transmission remains the weakest link in the power value chain,” said ANED.

It said: “To date, the maximum wheeling capacity reached by TCN has been 5,074.7MW versus its claims of increased capacity from 5,500MW to 6,000MW, wholly untested and unproven.

“Any plans by TCN to complete 22 critical projects captured in the 2016 budget has to be a function of the availability and release of the requisite funding required for same. Given that we are in the fourth quarter of 2016, it is not clear that TCN has received, nor will it receive, any funding that comes close to enabling it complete the indicated projects – a continued legacy of limited and poor funding of a vital aspect of power infrastructure.”

It explained that: “In view of the dire need of generation, as well as the generation thresholds in the Discos’ tariffs, which constitute the basis of their revenue recovery, it is inconceivable to think that any Disco would load-shed, thereby diminishing its revenue prospects and alienating its customers.

“Factually, a major contribution to the liquidity challenges that the Discos are currently experiencing is TCN’s infrastructure and technical limitations in wheeling power to the proper areas of a Disco’s geographical footprint.”

“Discos are currently experiencing a monthly loss in excess of N1 billion due to limited transmission capacities in various areas of the country, especially the northern part. Even worse, is TCN’s inability to meet its financial obligations, relative to this shortfall, thereby compromising the Discos’ ability to meet their obligations to the Market Operator,” it added.

ANED said it will welcome TCN’s operational improvement which it said can only happen with proper funding, upgrade of its project management capacity, and competent personnel.

It said the power privatisation was premised on turning around the operational profile of the TCN but that progress in that direction has remained quite minimal.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Crude Oil

Oil Slips With Energy Prices in Europe Halts Record Rally

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Crude Oil - Investors King

Oil dipped toward $72 a barrel in New York after prices of energy commodities in Europe halted a record-breaking run.

West Texas Intermediate futures fell 0.6%, having reached the highest intraday level since early August on Wednesday. A rally in European gas and power prices to unprecedented levels was set to end as industries were starting to curb consumption. The surge in energy rates could temporarily boost diesel demand by as much as 2 million barrels a day as consumers switch fuels, according to Citigroup Inc.

Still, the bullish signals for oil are continuing to increase. U.S. crude inventories dropped by more than 6 million barrels last week to a two-year low, according to government figures, as coronavirus vaccination programs permit economies to reopen. Chevron Corp. Chief Executive Officer Mike Wirth warned that the world is facing high energy prices for the foreseeable future.

The investor optimism is showing up in key oil time spreads widening. Trading of bullish Brent options also surged to a two-month high on Wednesday.

Prices have been pushed higher in recent days “by supply outages combined with expectations of switching from gas to oil in the power sector,” said Helge Andre Martinsen, a senior oil market analyst at DNB Bank ASA. “We still believe in softer prices toward year-end and early next year as curtailed production returns and OPEC+ continues to increase production.”

Strong prices for gas, liquefied natural gas and oil are expected to last “for a while” as producers resist the urge to drill again, Chevron’s Wirth told Bloomberg News. Norway’s Equinor ASA said Thursday it also expects European gas prices to remain high over winter.

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Energy

Fuel Scarcity: Petrol Sells N220 Per Litre in Nsukka

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Premium Motor Spirit, otherwise called petrol, now sells for between N200 and N220 per liter at the independent marketers’ service stations in Nsukka, Enugu State.

The News Agency of Nigeria is reporting the hike in the price against the official pump price of N162 per liter.

It said it started about a fortnight ago due to the scarcity of the commodity in the town and its environs.

Some residents of the town expressed deep worry over the development in separate interviews with NAN on Wednesday.

A civil servant, Stephen Ozioko, said the situation had further compounded the economic difficulties in the area.

Ozioko said many private car owners had been compelled to park their vehicles at home and move around in public transport.

He said: “Since the scarcity started, I decided to park my car and take public transport to the office and back home. N220 per liter is exorbitant and I cannot afford it considering my salary as a civil servant. I shall continue to use public transport until the situation returns to normal.”

A building material dealer, Timothy Ngwu, said the development had also led to an increase in transport fare in the area.

Ngwu said: “Some people now trek from Nsukka Old Park to Odenigbo Roundabout because of the 100 percent hike in fares from N50 to N100 by tricycle.

“Before now, transport fare from Nsukka to Enugu was N500, but transporters now charge between N800 and N1000.”

Also, a commuter bus driver, Victor Ogbonna, described the scarcity and hike in the price of petrol as “unfortunate and an ugly development”.

Ogbonna added: “Today, only a few filling stations are selling the commodity in Nsukka town, while others are shut.”

He alleged that some filling stations, which claimed to be out-of-stock, were selling to black marketers at night.

He said: “This is why black marketers have sprung up everywhere in the town, selling the commodity for about N300 per liter.”

NAN reports that virtually all the major marketers in the area have stopped the sale of petrol, claiming to be out-of-stock.

The people called on the government to urgently intervene in order to bring the situation under control and also put an end to its harsh economic effects on the messes.

NAN.

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Energy

DPR Targets N3.2T Revenue by Year-End

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Department of Petroleum Resources (DPR)-Investors king

Nigeria’s Department of Petroleum Resources (DPR) will hit the N3.2 trillion revenue target by December 2021, according to its Director/ Chief Executive Officer, Mr Sarki Auwalu.

Auwalu made the disclosure when he led a delegation of the DPR management team to the Executive Secretary of Petroleum Technology Development Fund (PTDF), Mr Bello Gusau, in Abuja on Wednesday.

He said that 70 percent of the revenue projection had already been met. “Last year, we exceed our revenue budget. We were given N1.5 trillion but we were able to generate N2.7trillion.

“This year, our revenue budget was N3.2 trillion. By the end of August 2021, we have generated up to 70 per cent.

“So, we with September, October, November and December, it is only the 30 per cent that we will work over,’’ he said

He noted that the government took advantage of fiscal terms within the old and new legislation, thereby creating a level of increased signature bonuses.

“We reorganise the work programme that is normally being done in the DPR to key into the new operational structure as we see it in the bill, now an act.

“That programme is being handled by the planning and strategic business unit as against what we use to have because the entire work programme is supposed to show not only technical but also commercial and viability of oil fields and to guarantee the return on investment for investors.

“We have also created an economic value and benchmarking unit to key into the new fiscal provisions of the PIA,’’ he said.

Commenting on capacity, Auwalu said the country stands at the advantage of exporting skills to emerging oil and gas countries across Africa with proper implementation of the newly passed Petroleum Industry Act.

This, he said, the DPR was ready to partner with the Fund to continue to build capacity in the oil and gas sector

He noted that the Federal Government was determined to create leeway that would encourage investors and drastically improve the nation’s petroleum industry.

He further noted that no fewer than 300 legal battles in the oil and gas industry in Nigeria, which had been stalled for the past 20 years in courts, had been resolved through alternative dispute resolution.

According to Auwalu, the DPR is strategising well to ensure effective implementation of the PIA.

Responding, Gusau commended the DPR for enabling the industry and enhancing business activities in the oil and gas sector.

He said that DPR remained the head of the oil and gas industry in Nigeria adding that the Fund was grateful to benefit from the wealth of ideas from DPR.

“The last time we visited, we had a good discussion and issues raised are being implemented like tracking the inflow of funds in signature bonus accounts.

“We extended the meeting and involved ministry of Finance, Accountant General office and even the Central Bank of Nigeria (CBN).

“Sitting at field development plans and attending significant meetings, helped us to know where and what the industry is trying to do and it also helps to inform our decisions in training and capacity plans,’’ he said

He urged the DPR to continue on its effort to ensure an efficient and productive petroleum industry in Nigeria

He assured collaboration with all as the head of the implementation committee of the Petroleum Industry Act. (NAN)

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