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Power Firms Fail to Provide Meters for 58% of Customers

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  • Power Firms Fail to Provide Meters for 58% of Customers

Electricity consumers have expressed disappointment as nine of the 11 power distribution companies in the country have not supplied meters to more than half of their customers.

The total power generation has been hovering around 3,000 megawatts in recent months on the back of gas constraints, transmission line and distribution network limitations and water management issues, leaving at least 3,000MW idle.

A new report by the Nigerian Electricity Regulatory Commission obtained by our correspondent on Saturday showed that out of the 8,135,730 registered electricity customers, only 3,434,003 (about 42 per cent) had been metered as of the end of the first quarter of this year.

“The data is disappointing; we are moving at a snail’s pace. We have the capacity to meet up the requirement if we are conscious to do what is right. Looking at those who have actually applied to have meters, more than 50 per cent of those who need meters and who have applied for them are unmetered, then we cannot actually say that we are making progress,” the President, Electricity Consumers Association of Nigeria, Mr Chijioke James, told our correspondent.

“Not until every customer that is eligible to have a meter is actually metered, then as far as we are concerned, they (electricity distribution firms) are not doing anything. A lot of people are on estimated billing and corruption is still there,” he added.

According to NERC’s first quarter 2018 report, in comparison with the last quarter of 2017, the registered customers increased by 2.37 per cent, while the metered customers declined by 3.9 per cent.

The regulator attributed the increase in the number of registered customers to the ongoing enumeration by the Discos, which it said had helped them (power distributors) to register some individuals who had previously consumed electricity through illegal connection to the networks.

“Metering still remains a key challenge facing the industry,” NERC said, adding that only two Discos, Benin and Port Harcourt, had metered up to 50 per cent of their customers as of the end of the first quarter of this year.

According to the report, three in every five registered electricity consumers are unmetered, with the Yola Disco having the lowest metering rate at 21 per cent.

“A major initiative towards improving revenue collection in the Nigerian electricity industry is the provision of meters to all end-use consumers of electricity,” the regulator stated.

It said the Meter Asset Provider Regulations’ scheme was launched recently to enable third-party meter providers to work with the Discos in bridging the metering gap in the industry.

The MAP Regulations, 2018 was introduced to eliminate estimated billing practice, attract private investments into the provision of metering services, and close the metering gap through accelerated meter rollout.

NERC said, “Notwithstanding the growth in the registered customer population during the first quarter of 2018, the incremental meter deployment by Discos is significantly lower than the targeted quarterly metering stated in the performance agreement with the Bureau of Public Enterprises. Notably, with the exception of Port Harcourt and Benin Discos, none of the remaining Discos has metered half of their registered customers.

“To this end, the commission shall continue to work relentlessly with the Discos to ensure total compliance with their respective metering targets as contained in their Performance Agreement with the BPE by enforcing the Meter Asset Provider Regulations.”

In the first quarter, the power distributors received a total of 108,874 complaints from their customers and resolved a total of 72,846, representing 67 per cent of the complaints received, according to the report.

NERC noted that customer complaints were typically on metering, estimated billing and service interruption, among others.

The regulator said, “Metering and billing dominated the customer complaints, both accounting for 64,197 (i.e. 59 per cent) of the total complaints in the first quarter of 2018.”

It said out of the N171.1bn billed customers in the first quarter, only N106.6bn was recovered, representing 62.3 per cent collection efficiency.

“Overall, the Discos’ collection efficiency remains abysmally poor, as just a little above the half of the revenue billed is recovered as at when due. The poor collection efficiency by the Discos has negatively impacted on the financial liquidity of the industry, which in turn, has led to reduced investment in the Nigerian Electricity Supply Industry,” the regulator stated.

NERC noted that a major factor contributing to low collection efficiency “is customers’ dissatisfaction with estimated billing, which often resulted in unwillingness to pay.”

The ECAN president, James, said some customers paid for meters but the Discos had yet to supply to them, adding, “If we are in a country where consumers’ rights are adequately protected, all the major distribution companies in Nigeria would have gone under by now with litigation. They don’t have any right not to meter all the consumers.

“Now, it is worse off for them that the consumers took the responsibility upon themselves to get metered; many of them paid and for the past one year, they have not been metered, and there are no sanctions. If we open a class action against the distribution companies, all of them will fold up. I am talking to my team of lawyers and we are beginning to look at it.”

The Chief Executive Officer, Association of Nigerian Electricity Distributors, an umbrella body for the Discos, Mr Azu Obiaya, in a telephone interview with our correspondent, said the lack of cost-reflective tariff was hampering the power investors’ ability to invest in the sector.

He stated, “Sooner is better than later in terms of resolution of this tariff gap. The generation companies right now are only being supported by the prepayment assurance guarantee, which is supposed to end through the end of this year. Without that buffer, we are back to a much more challenging situation in which the Discos are unable to remit the kind of money that is necessary to make the market whole, because again the tariff gap exists.

“There is an urgent need for us to put our heads together in the sector and come up with a solution to this market shortfall situation.”

According to NERC, the Discos were issued a total invoice of N163.1bn for energy received from Nigerian Bulk Electricity Trading Plc and for the services provided by the market operator in the first quarter of this year, only N51.2bn of the invoice was settled, creating a total deficit of N112bn.

“Financial illiquidity remains the most significant challenge affecting the industry’s sustainability. This serious liquidity challenge is partly attributed to non-cost-reflective tariffs and high technical and commercial losses aggravated by consumers’ apathy to payment arising from estimated billing and poor quality of supply in most load centres,” it added.

The commission said although the low remittance by Discos to the NBET and the MOs was partly due to the low collection and existing tariff shortfall, it had been observed that the Discos seemed to have capped their monthly remittances, thereby keeping more than their fair share from the market funds.

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.

Economy

Seplat Petroleum Pays US$564.165 Million to Federal Government in 2020

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Seplat Petroleum, an indigenous Nigerian upstream exploration and production company, announced it paid a total sum of US$564.165 million to the Federal Government in 2020.

In the report on payments made available to the Nigerian Stock Exchange and seen by Investors King, Seplat Petroleum paid US$389.576 million to the Nigerian National Petroleum Corporation (NNPC) as production entitlement in 2020.

Production entitlement is the government’s share of production in the period under review from projects operated by Seplat.

This comprises crude oil and gas attributable to the Nigerian government by virtue of its participation as an equity holder in projects within its sovereign jurisdiction (Nigeria).

Also, Seplat paid US$130.009 million to the Department of Petroleum Resources in 2020. A breakdown of the amount showed US$111.633 million was paid as royalties while US$18.376 million was paid as fees.

Similarly, US$579,361 was paid as a fee to the Nigeria Export Supervision Scheme.

The energy company made another payment of US$17.935 million in fee for 2020.

While the Nigerian Content Development and Monitoring Board received US$4.826 million in fee from Seplat in 2020.

Seplat paid US$21.239 million in taxes to the Federal Inland Revenue Service in 2020.

Therefore, Seplat Petroleum paid a total sum of US$564.165 million to the Federal Government in the 2020 financial year. See the details below.

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Economy

FIRS Sets N5.9 Trillion Revenue Target for 2021

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FIRS to Generate N5.9 Trillion Revenue  in 2021

Mohammed Nami, the Chairman of Federal Inland Revenue Service, FIRS, on Friday said the agency is projecting total revenue of N5.9 trillion for the 2021 fiscal year.

Nami stated this while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence of its proposed Revenue and Expenditure Estimates.

According to the Chairman, N4.26 trillion and N1.64 trillion were expected to come from non-oil and oil components, respectively.

However, Nami put the cost of collecting the projected revenue at N289.25 billion or 7 percent of the proposed total revenue for the year, higher than the N180.76 billion spent in 2020 to fund the three operational expenditure heads for the year.

He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive.

Speaking on while the agency failed to meet its 2020 target, Nami said “There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.

“And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.

 

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Economy

Gov Emmanuel Attracts $1.4b Fertilizer Plant to Akwa Ibom

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The Governor of Akwa Ibom State, Mr. Udom Emmanuel has signed an agreement for the citing of a multi billion fertilizer plant in his State.

Governor Emmanuel was part of a Nigerian delegation led by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that visited Morocco to set out the next steps of the $1.4 Bln fertilizer production plant project launched in June 2018.

The agreement between the OCP Africa, the Nigerian Sovereign Investment Authority and the Akwa Ibom State Government will birth one of the biggest investments in the fertilizer production industry worldwide.

The signing ceremony took place at the Mohammed VI Polytechnic University (UMP6).

Mr. Emmanuel signed one of the agreements of the partnership, which covers a memorandum of understanding between OCP Africa, the Akwa Ibom State in Nigeria and the NSIA on land acquisition, administrative facilitation, and common agricultural development projects in the Akwa Ibom State.

Speaking while signing the agreement, Governor Emmanuel said, “Our state is receptive to investments and we are prepared to offer the necessary support to make the project a reality.

“With a site that is suitably located to enable operational logistics and an abundance of gas resources, all that is left is for the parties to accelerate the project development process”, Mr. Udom said.

The agreement reached between the Nigerian Government and the OCP further links OCP, Mobil Producing Nigeria (MPN), the NNPC, the Gas Aggregation Company Nigeria (GACN), and the NSIA.

The two partners agreed to strengthen further their solid partnership leveraging Nigerian gas and the Moroccan phosphate.

This project will lead to a multipurpose industrial platform in Nigeria, which will use Nigerian gas and Moroccan phosphate to produce 750,000 tons of ammonia and 1 million tons of phosphate fertilizers annually by 2025.

The visit of the Nigerian delegation to Morocco takes place within the frame of the partnership sealed between OCP Group and the Nigerian Government to support and develop Nigeria’s agriculture industry.

Following the success of the first phase of Nigeria‘s Presidential Fertilizer Initiative (PFI) and the progress of the fertilizer production plant project launched in 2018 by OCP and NSIA, the Moroccan phosphates group and the Nigerian government delegation have agreed on the next steps of their joint project which is rapidly taking shape.

Several cooperation agreements were inked on Tuesday at the Mohammed VI Polytechnic University (UM6P) by OCP Africa and the Nigerian delegation. Through these deals, OCP reaffirms its unwavering support of agricultural development initiatives in Nigeria including PFI.

OCP Africa and the NSIA have agreed, inter alia, to set up a joint venture which will oversee the development of the industrial platform that will produce ammonia and fertilizers in Nigeria.

The OCP has also pledged to supply Nigerian famers with quality fertilizers adapted to the needs of their soil at competitive prices and produced locally.

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