- Power Supply Increases by 11%
Nigeria’s electricity supply has risen by 11 per cent in the past one week as Electricity Generation Companies, GENCOs, Transmission Company of Nigeria, TCN and Electricity Distribution Companies; DISCOs strive to provide adequate power to consumers.
The supply which stood at 3,425 megawatts, MW a week ago has risen to 3,811Mw last Saturday as operators continue to build their capacities after the recent system collapse.
However, report yesterday showed a slight move to 3,877.60MW as against previous record, with lowest generation at 3,763.8MW.
In a similar vein, the country’s power generation had peaked to about 4,351.5MW on Sunday.
Despite the marginal increase, investigations showed that many consumers continue to live in darkness as the current supply showed 8,989Mw below the nation’s 12,800Mw estimated daily national demand.
High frequency constraint
The Presidency report that confirmed the supply stated that, “On May 13, 2017, average power sent out was 3811Wh/hour (up by 93MWh/h). The reported gas constraint was 1879MW.”
“The reported line constraint was 200MW. The reported high frequency constraint was 0MW. The water management constraint was 260MW. The power sector lost an estimated N1,123,000, 000 on May 13 2017 due to constraints,” it added.
However, the Nigerian Electricity Regulatory Commission, NERC stated that it has started working with the Ministry of Power, Works and Housing and other stakeholders to implement innovative ways to address the liquidity gap and other issues militating against improved electricity supply in the nation.
“The Commission in recognition of the importance of protecting the interest of electricity customers has rapidly set up 19 Customer Complaints Forum Offices nationwide with over 10 more in the pipeline to be opened this year. The monitoring and enforcement actions have been intensified by the Commission to ensure that the electricity industry operators, especially the DISCO’s comply with the rulings of the NERC Forum Offices and other regulations. A lot of the defaulting DISCOs, including the TCN and some GENCOs have been sanctioned by the Commission. Most of these defaulters have either fully paid the fines or applied for reconsideration. These regulatory oversights of the Commission have tremendously increased the rate of voluntary compliance by the electricity industry operators, especially on issues bordering on customer complaints.”
“There is no doubt that the electricity sector has not achieved the projected level of improvement due to various reasons that are attributable to the operators deficiencies and beyond. These challenges are not peculiar to only Nigeria, but also did occur within 3 to 5 years in similar forms in all other countries that undertook similar power sector reform. The Nigerian Electricity Regulatory Commission is saddled with the responsibility of protecting the interest of both consumers and well as investors when it comes to the issue of electricity pricing as well as electricity supply in Nigeria.
The allegation that the Commission is siding with the operators is simply untrue.”
“As Nigerians are fully aware, the macroeconomic indices such as the rate of inflation and exchange rate have steadily gone up over the last one year. This increase has affected the prices of all other commodities in the country. The purchasing power of Naira has crashed to all time low within the last couple of months. The MYTO methodology (pricing methodology) mandates the Commission to carry out a minor review of the Tariff bi-annually and adjust these exogenous factors that are beyond the control of the investors and the regulators. The official exchange rate in the country has risen from N198.97 to over N305.05 to a dollar,” it added
Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd
The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.
The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.
The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.
The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.
Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.
The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.
Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins
Oil Prices Recover from 4 Percent Decline as Joe Biden Wins
Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.
This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.
Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.
On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.
“Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”
The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.
“There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.
“Either you’re crimping energy demand or consumption behavior.”
Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020
Revenue of OPEC Members to Drop to 18 Year Low in 2020
The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.
EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.
“If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.
The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.
It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.
It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.
“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”
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