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Ibadan DisCo Loses over N1b to Energy Theft Monthly

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Electricity Pole
  • Ibadan DisCo Loses over N1b to Energy Theft Monthly

It is worrisome that the power sector situation is not getting better. This is made worse by the unpatriotic attitude of some consumers, who would not want to pay for what they consume, the Team Lead Revenue Protection, Ibadan Electricity Distribution Company (IBEDC) Plc, Jude Ugwuoke, has said.

Ugwuoke said the electricity distribution companies (DisCos) are running into huge losses, noting that the Ibadan distribution company alone loses over N1 billion to energy theft monthly. He said there’s no business person that would invest and lose such amount of money and be able to grow. It’s not likely, he said.

He said the effect of energy theft was seriously telling on the Discos hence the power shutdowns, which often occur in most parts of the country. He appealed to Nigerians to desist from this kind of practice to enable the DisCos deliver on their promises.

He stated that people are being sensitised on the need to discontinue from energy theft, spread the message across so that people can begin to see the need to pay for the electricity they consume.

Ugwuoke told The Nation in Lagos that the major challenge confronting the DisCos was energy theft by consumers. According to him, about 70 per cent of installed meters are now bypassed, adding that meters are to measure the quantum of energy being consumed but when that has been distorted, there would be huge losses as a result.

‘’Consumers use the energy and they don’t want to pay. A lot of consumers bypass the meters, which the DisCos had invested huge amount of money on’’. It’s a very big problem to the DisCos, he said, but noted that with the kind of strategies the distribution companies are putting in place, the challenges would be taken care of within a short time.

Ugwuoke confirmed that the DisCos also have their own challenges too. He agreed the distribution companies’ metering standard needed to be checked but added that on no account should anybody tamper with the installation even if the meters were not installed at the right place. “It’s against the law, so we need to ensure that we stop tampering with meters, and when this is done, things will change,” he said.

“We have illegal consumers who are not DisCo customers, they only hook on to the network without following the due process, their information would not be provided, they would be using electricity free of charge.”

He warned that the Discos are monitoring these activities and anyone caught in the act would be brought to book.

He also stated that Ibadan DisCo had embarked on enumeration exercise to reorganise its network, so as to know the number of its existing customers. Ugwuoke disclosed that the IBEDC had spent over N5 billion in this process trying to ensure the company effectively runs that process.

With this, the company would be able to know the number of its existing customers, the process according to him, is also targeted at bringing in those illegal consumers and legalise them and bring them to the company’s data base.

“We will be able to know the number of people in our network, that will help in planning and budgeting. So, the moment we know the number of customers we have through this enumeration, we will be able to plan ahead, we will be able to look at what to put in place in terms of metering, among others,” adding that other DisCos are doing the same, and other states are equally embarking on that process.

Stressing the need for metering, Ugwuoke said the moment the customers are all metered and they stop tampering with these meters, pay for what they consume, the DisCos will equally be able to pay for what they consume, adding that the distribution companies too do get bills from the transmission company.

“So, the moment there’s check and balances and people stop tampering with the meters, we will have proper accountability of our energy, the era of paying for what you did not consume or the DisCos losing excessively will no longer be there,” he said.

The Nigerian Electricity Regulatory Commission (NERC) is equally putting measures to ensure that consumers of electricity do not tamper with installations. According to him, the regulatory body had redefined penalties for offenders. Before now, the single phase tampering was N25,000 but now it’s N50,000 while the three phase meter tampering is N100,000.

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.

Crude Oil

Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

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Oil Dips Below $62 in New York Though Banks Say Rally Can Extend

Oil retreated from an earlier rally with investment banks and traders predicting the market can go significantly higher in the months to come.

Futures in New York pared much of an earlier increase to $63 a barrel as the dollar climbed and equities slipped. Bank of America said prices could reach $70 at some point this year, while Socar Trading SA sees global benchmark Brent hitting $80 a barrel before the end of the year as the glut of inventories built up during the Covid-19 pandemic is drained by the summer.

The loss of oil output after the big freeze in the U.S. should help the market firm as much of the world emerges from lockdowns, according to Trafigura Group. Inventory data due later Tuesday from the American Petroleum Institute and more from the Energy Department on Wednesday will shed more light on how the Texas freeze disrupted U.S. oil supply last week.

Oil has surged this year after Saudi Arabia pledged to unilaterally cut 1 million barrels a day in February and March, with Goldman Sachs Group Inc. predicting the rally will accelerate as demand outpaces global supply. Russia and Riyadh, however, will next week once again head into an OPEC+ meeting with differing opinions about adding more crude to the market.

“The freeze in the U.S. has proved supportive as production was cut,” said Hans van Cleef, senior energy economist at ABN Amro. “We still expect that Russia will push for a significant rise in production,” which could soon weigh on prices, he said.

PRICES

  • West Texas Intermediate for April fell 27 cents to $61.43 a barrel at 9:20 a.m. New York time
  • Brent for April settlement fell 8 cents to $65.16

Brent’s prompt timespread firmed in a bullish backwardation structure to the widest in more than a year. The gap rose above $1 a barrel on Tuesday before easing to 87 cents. That compares with 25 cents at the start of the month.

JPMorgan Chase & Co. and oil trader Vitol Group shot down talk of a new oil supercycle, though they said a lack of supply response will keep prices for crude prices firm in the short term.

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Crude Oil

Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

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Oil Prices Rise With Storm-hit U.S. Output Set for Slow Return

Oil prices rose on Monday as the slow return of U.S. crude output cut by frigid conditions served as a reminder of the tight supply situation, just as demand recovers from the depths of the COVID-19 pandemic.

Brent crude was up $1.38, or 2.2%, at $64.29 per barrel. West Texas Intermediate gained $1.38, or 2.33%, to trade at $60.62 per barrel.

Abnormally cold weather in Texas and the Plains states forced the shutdown of up to 4 million barrels per day (bpd) of crude production along with 21 billion cubic feet of natural gas output, analysts estimated.

Shale oil producers in the region could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output affected, sources said, as frozen pipes and power supply interruptions slow their recovery.

“With three-quarters of fracking crews standing down, the likelihood of a fast resumption is low,” ANZ Research said in a note.

For the first time since November, U.S. drilling companies cut the number of oil rigs operating due to the cold and snow enveloping Texas, New Mexico and other energy-producing centres.

OPEC+ oil producers are set to meet on March 4, with sources saying the group is likely to ease curbs on supply after April given a recovery in prices, although any increase in output will likely be modest given lingering uncertainty over the pandemic.

“Saudi Arabia is eager to pursue yet higher prices in order to cover its social break-even expenses at around $80 a barrel while Russia is strongly focused on unwinding current cuts and getting back to normal production,” said SEB chief commodity analyst Bjarne Schieldrop.

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Crude Oil

Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

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Crude Oil Rose Above $65 Per Barrel as US Production Drop Due to Texas Weather

Oil prices rose to $65.47 per barrel on Thursday as crude oil production dropped in the US due to frigid Texas weather.

The unusual weather has left millions in the dark and forced oil producers to shut down production. According to reports, at least the winter blast has claimed 24 lives.

Brent crude oil gained $2 to $65.47 on Thursday morning before pulling back to $64.62 per barrel around 11:00 am Nigerian time.

U.S. West Texas Intermediate (WTI) crude rose 2.3 percent to settle at $61.74 per barrel.

“This has just sent us to the next level,” said Bob Yawger, director of energy futures at Mizuho in New York. “Crude oil WTI will probably max out somewhere pretty close to $65.65, refinery utilization rate will probably slide to somewhere around 76%,” Yawger said.

However, the report that Saudi Arabia plans to increase production in the coming months weighed on crude oil as it can be seen in the chart below.

Prince Abdulaziz bin Salman, Saudi Arabian Energy Minister, warned that it was too early to declare victory against the COVID-19 virus and that oil producers must remain “extremely cautious”.

“We are in a much better place than we were a year ago, but I must warn, once again, against complacency. The uncertainty is very high, and we have to be extremely cautious,” he told an energy industry event.

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