- Firms Risk Suspension of Licences Over N345m Unpaid Fines
Some electricity firms are at the verge of losing their licences three years after privatisation for failing to comply with the rules and regulations in the power sector.This is because many electricity firms are contravening the Nigerian Electricity Regulatory Commission (NERC) Electricity Industry (Enforcement) Regulations 2014, which specified strict action against any form of unruliness in the sector, even as many are yet to pay over N345 million cumulative fines imposed by NERC.
This is because many electricity firms are contravening the Nigerian Electricity Regulatory Commission (NERC) Electricity Industry (Enforcement) Regulations 2014, which specified strict action against any form of unruliness in the sector, even as many are yet to pay over N345 million cumulative fines imposed by NERC.
Lack of compliance and adherence to industry rules are some of the reasons weakening the capacity of NERC to effectively regulate the industry and institute credible electricity operations in the country.Indeed, the regulator would have used part of the money realised from such penalties to execute some of its programmes, which are being challenged by paucity of funds.
For instance, the Commission had recently fined Afam Power Plant, and Eko Electricity Distribution Company (EKEDC) the sum of N66.6 million for failing to submit audited financial reports for 2013 and 2014.
Already, the fines imposed on the firms have since attracted additional N62 million, being the cumulative for five per cent interest daily for I9 days following the expiration of the two weeks grace granted by NERC, which expired on the December 22, 20I6.In a statement, the Acting Chairman, NERC, Dr. Anthony Akah, explained that Directive 162 of NERC found Afam Power in breach of its licensing terms and other operating conditions when it failed to file
In a statement, the Acting Chairman, NERC, Dr. Anthony Akah, explained that Directive 162 of NERC found Afam Power in breach of its licensing terms and other operating conditions when it failed to file audited financial report for 2014, and subsequently liable to pay N18.510 million.Similarly, Directive 163 found EKEDC in violation of its licensing terms and other operating condition over late submission of its 2013 and non-submission of 2014 audited financial reports. The company is, therefore, liable to pay N48.09 0million fine.
Similarly, Directive 163 found EKEDC in violation of its licensing terms and other operating condition over late submission of its 2013 and non-submission of 2014 audited financial reports. The company is, therefore, liable to pay N48.09 0million fine.
Both Directives signed by Akah and General Manager, Legal, Licensing and Environment, Olufunke Dinneh, expected the companies to pay their fines within two weeks beginning from December 9, 2016 when the directives were signed.
Such impunity is not restricted to the Eko and Afam alone, as virtually all the electricity companies in Nigeria had at one point or another been fined by NERC, except for a few, many of them adamantly refused to pay the fines, which under the law is supposed to attract additional five per cent daily upon the expiration of the grace period.
Electricity firms such as Ibadan Electricity Distribution Company (IBEDC); Ikeja Electricity Distribution Company (IKEDC); Port Harcourt Electricity Distribution Company (PHED); and a host of others had been fined for failing to satisfactorily treat various service complaints by their customers as well as not submitting their statutory quarterly operations reports.
Specifically, Ibadan, Ikeja, Port Harcourt and Enugu Discos in August last year, were fined N24.56 million for various infractions under the Electric Power Reform Act 2005.For failing to submit its audited financial report since 2013, NERC imposed another fine of N37.5 million on the PHED in November of the same year.
A copy of Electricity Industry (Enforcement) Regulations 2014, obtained by The Guardian spelt out the punishment for such offences.The document stated: “Without prejudice to any provision of the Act or any other regulatory instrument, the Commission may suspend any license if, in its opinion: the licensee has been found pursuant to the regulations to have breached any term or condition of its license, the breach of which is expressly declared by the license terms and conditions to render it liable to suspension or cancellation; or the financial position of the licensee is such that the licensee is unable to fully and efficiently discharge the duties and obligations imposed by the licence.”
Commenting further on the sanctions Akah, said: “The Commission would do whatever is required to ensure discipline in the Nigerian Electricity Supply Industry (NESI). It is only when stakeholders endeavour to play by the rules that we can begin to reap maximum benefits of the privatisation in the Sector.
“We expect the operators to act in good faith and in line with the industry rules, standards and conditions for their licenses as the Commission will not compromise on international best practices. Customers are also expected to fulfill their obligations to their service providers by paying their bills and not to engage in electricity theft”.
A source in NERC however told The Guardian yesterday on the telephone that it will no longer be business as usual for the electricity firms this year, as the Commission will be implementing the provisions of the Electricity Industry (Enforcement) Regulations 2014.
“NERC is no longer going to allow unruly behaviours in the sector and we are going to melt out the necessary punishment if found contravening the law,” the source added.
Spokesman for Eko Disco, Godwin Idemudia, told The Guardian yesterday that firm has formerly expressed its reservation regarding the fine.According to him, “NERC said we did not submit our books on time and we told them we did. We are talking and looking at how to resolve the issue. We are definitely not happy about the situation.”
Crude Oil Rises to $72 a Barrel on Strong Demand Recovery
Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in the United States, Europe and China as rising vaccination rates lead to an easing of pandemic curbs.
Brent crude futures edged up 13 cents to $72.65 a barrel to 1145 GMT, a day after closing at their highest since May 2019.
U.S. West Texas Intermediate (WTI) crude futures were up 14 cents to $70.43 a barrel, a day after their highest close since October 2018.
U.S. investment bank Goldman Sachs expects Brent crude prices to reach $80 per barrel this summer as vaccination rollouts boost global economic activity.
The International Energy Agency said in its monthly report that OPEC+ oil producers would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.
“OPEC+ needs to open the taps to keep the world oil markets adequately supplied,” the Paris-based energy watchdog said.
It said that rising demand and countries’ short-term policies were at odds with the IEA’s call to end new oil, gas and coal funding.
“In 2022 there is scope for the 24-member OPEC+ group, led by Saudi Arabia and Russia, to ramp up crude supply by 1.4 million barrels per day (bpd) above its July 2021-March 2022 target,” the IEA said.
Data showing road traffic returning to pre-COVID-19 levels in North America and most of Europe was encouraging, ANZ Research analysts said in a note.
“Even the jet fuel market is showing signs of improvement, with flights in Europe rising 17% over the past two weeks, according to Eurocontrol,” ANZ analysts said.
Africa Oil Week Remains Force of Good for Africa
Hyve Group Plc, organisers of Africa Oil Week have confirmed that business opportunities and discussions at the 2021 edition will remain focused on driving investment into Africa for its sustainable socio-economic development, as it has done for the past 27 years.
The event which will temporarily move to Dubai for 2021 due to COVID-19 restrictions in South Africa will take place on 8-11 November 2021 and has support from key African stakeholders.
Atty. Saifuah-Mai Gray, CEO of National Oil Company of Liberia said “As an oil and gas hub, Dubai represents a huge opportunity for Governments to meet a high concentration of investors with the financial and technical capability to partner in our national upstream”
Africa Oil Week is known for driving deals and transaction across the African oil and gas sector, and after being forced to host the 2020 edition virtually, confirmation that a live event will take place in 2021 has delighted clients.
Miriam Seleoane, Assistant Director at the Department of Trade and Industry and Competition said
“The DTIC has supported the Africa Oil Week for many years. For 2021 we will be taking a delegation of 20+ companies to the Oil Week to advance partnership and investment dialogue between our South African businesses and international partners. Africa Oil Week remains a huge platform for the DTIC and our South African private sector”.
The event will run under the theme “succeeding in a changed market”, and it will be the only large-scale oil and gas event focused solely on Africa to run in person in 2021.
In a previous statement, the organiser cited Dubai as the “next best location” after Cape Town due to the exceptional progress made in the UAE’s vaccination programme. Dubai is also the leading financial centre in the Middle East, Africa and South Asia and presents an opportunity for attendees to meet with new capital holders, further driving investment into Africa.
The 2022 event will return to Cape Town, where organises have said it is the event’s “natural home” and to which they are strongly committed for the long-term.
Crude Oil Rebounds on Thursday After Slipping on U.S Weak Demand
Oil prices rose on Thursday a day after slipping on data indicating weak U.S. driving season fuel demand as investors eyed upcoming U.S. economic data.
Brent crude oil futures were up 18 cents, or 0.25%, at $72.40 a barrel, holding just shy of a high not seen since May 2019.
U.S. West Texas Intermediate oil futures rose 11 cents, or 0.16%, to $70.07 a barrel, staying near its highest since Oct. 2018.
“The market is recovering impressively from yesterday’s dismal weekly EIA report, the drop in weekly gasoline demand was particularly disappointing,” said Tamas Varga, analyst at PVM Oil Associates.
“It will interesting to see whether the monthly OPEC report due out later will confirm last month’s upbeat demand assessment for the second half the year. If it does, as expected, it should support oil prices.”
Varga added that U.S. inflation data and jobless claims would provide more direction on the health of world’s biggest economy and clues as to whether the Federal Reserve might start tapering stimulus.
U.S. crude oil stockpiles that include the Strategic Petroleum Reserve (SPR) fell for the 11th straight week as refiners ramped up output, but fuel inventories grew sharply due to weak consumer demand, the Energy Information Administration (EIA) said on Wednesday.
Crude inventories that exclude the SPR fell by 5.2 million barrels in the week to June 4 to 474 million barrels, the third consecutive weekly drop. But fuel stocks were up sharply, with product supplied falling to 17.7 million barrels per day (bpd) versus 19.1 million the week before.
Implied gasoline demand fell to 8.48 million bpd in the week to June 4, down from 9.15 million bpd from the week before, but up from 7.9 million bpd a year ago, EIA data showed.
Weighing on prices, India’s fuel demand slumped in May to its lowest since August last year, with a second COVID-19 wave stalling mobility and muting economic activity in the world’s third largest oil consumer.
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