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Abuja Disco to Install 900,000 Free Meters at a Cost of N23bn

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Abuja Electricity Distribution Company (AEDC) has perfected plans to install 900,000 meters in the next eighteen months.

The power distributing company said the Federal Government who owned 40 percent of the company has provided enough funds for the installation of meters for customers under its franchisee.

According to the Managing Director of AEDC, Engr. Ernest Mupwaya, AEDC will commence the installation with 101,000 free meters to customers between now and December 2021.

Mupwaya said “The significance of this program is that it has been designed with sufficient resources to meter all customers.

“The Federal Government of Nigeria who has 40% shareholding, have sourced sufficient funding to support discos through a low interest shareholder loan that will make it possible for DISCOs to receive sufficient meters to close the metering gap for good.”

He recalled that “Over the years, the company has embarked on various metering initiatives such as CAPMI and MAP. These programs have achieved some successes that resulted in metering of over 300,000 customers.

“Currently, with the flag-off of this National Free Mass Program, AEDC will receive a total of 900,000 meters, at the cost of 23 billion which will be sufficient to meter all customers including replacement of defective meters.

“Between now and December 2021 AEDC has planned to install over 101,000 meters at a cost of N 6bn without charging customers. The rest of the meters will be installed 18 months after, through a comprehensive role out program that will result in simultaneous installations in all three states of Niger, Kogi and Nassarawa in addition to FCT.

“The metering of customers have a huge positive implication not only to the electricity industry but to the entire economy in a number of ways.”

“Firstly, massive metering will create jobs through installation and inspections of meters after installations.

“Secondly, other jobs will be created in meter manufacturing, logistics and supply chains associated with making meters available in Nigeria. Thirdly, massive metering will improve the transparency in electricity transaction which will result in increased revenues that can be channelled into service improvement.

“Improved Services will support improved economic activities that will impact both informal and formal sectors. This will lead to electricity industry transformation along with numerous spillover effect to the economy.

“On this note, I wish to appeal to customers to accept the meters and resist any attempt by unscrupulous people who may approach them, with an offer to compromise the meters.

“The regulator NERC has put in place punitive penalties for those caught bypassing the meter to the extent that the fines override the perceived benefit apart from damaging the good working relationship with the discos.

“Energy theft also diverts resources which are meant to improve the service being provided. We believe that we can work together in ensuring that the metering challenge is brought to permanent end as we face a new dawn.

“However I want to acknowledge that the majority of our customers are law abiding citizens and they have been supporting us through the difficulties associated with transactions through estimated billing.

“I pay tribute to our customers as we cut the corner and face a new dawn in electricity transformation.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Nigeria Faces Fuel Crisis with Petrol Costs Surging to N978/Litre

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Petrol - Investors King

Nigeria is grappling with a severe fuel crisis as the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has skyrocketed to N978 per litre.

This surge, driven by a depreciating naira and rising international costs, has led to widespread fuel shortages and long queues at filling stations across the country.

The latest figures reveal that the landing cost—which includes the international price, shipping, insurance, and other charges—has increased from N720 per litre in October 2023.

This escalation is attributed to the naira’s depreciation, which hit a three-month low of N1,530 per dollar on the parallel market this week, exacerbating the already dire economic situation.

“The rising landing cost of petrol is a result of the escalating foreign exchange (FX) crisis. There are market interventions through subsidies, as most Nigerians cannot afford the market price for petrol,” a senior executive in the downstream sector explained.

Despite the federal government’s denial of an ongoing subsidy, a report from the finance minister, Wale Edun, projected that fuel subsidies could cost about N5.4 trillion in 2024, up from N3.6 trillion in 2023.

The fuel scarcity has led to black market prices soaring between N1,000 and N1,100 per litre, while some retail outlets in Abuja, Nasarawa, and Niger have hiked pump prices to N900 per litre.

Motorists have been forced to spend hours in queues, further straining their daily lives.

NNPC Limited attributed the current fuel queues to recent thunderstorms and logistical challenges disrupting activities at fuel-loading jetties.

The company assured stakeholders that it is working to resolve the situation and clear the queues.

“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” said Mele Kyari, the group’s general manager.

He also mentioned that NNPC is considering securing a $2 billion loan using crude oil pre-payments as collateral to support its business activities.

Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies, noted, “The government is partially subsidizing the commodity for political, social, and economic reasons. While economically sound, the social and political costs are significant.”

Market analysts have called for a review of dollar-based fee collections to reduce petrol costs. “We must resist the dollarization of the Nigerian economy. There are some fee collections in dollars that are also pushing up the landing cost of petrol,” a source said.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) confirmed that NNPC is addressing the supply issues, but warned that the queues might persist for days, especially in locations far from major depots.

“Once they start loading, it takes some days to clear the queues. And don’t forget that filling stations in Abuja get products from Lagos, Oghara, Warri, Port Harcourt, or Calabar, and that takes more than three days turn-around time to accomplish,” said PETROAN president Billy Gillis-Harry.

He said there is a need for collaboration between the government, NNPC, and downstream operators to find a lasting solution to the fuel scarcity.

“We need a clearly defined council with grassroots knowledge of the business to project and address problems based on empirical evidence,” he stated.

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Egyptian Inflation Eases Despite Bread Price Hike

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Egyptian pound

Egyptian inflation eased for the fourth consecutive month in June despite a historic increase in the cost of subsidized bread that feeds a significant portion of the population.

Consumer prices in urban areas rose at an annual rate of 27.5%, down from 28.1% in May, according to the state statistics agency CAPMAS.

On a month-to-month basis, prices grew by 1.6%.

This latest deceleration comes after authorities implemented a 300% hike in the price of subsidized bread on June 1, the first such move since the 1970s.

Although some economists had anticipated an inflationary surge, the impact on overall inflation was minimal due to the relatively small weight of bread in the consumer price index, explained Mohamed Abu Basha, head of research at EFG Hermes.

Food and beverage prices, the largest component of Egypt’s inflation basket, increased by 31.9% year-on-year, compared to 31% in May, and rose 2.6% on a monthly basis.

Despite the ongoing challenges, the rate of inflation has been slowing for eight of the past nine months, even after a significant devaluation of the Egyptian pound in 2024, which saw the currency plummet almost 40% against the dollar.

The reduced inflation rate reflects how the lower value of the pound on the now-stabilized local black market had already been factored into retail pricing strategies.

Also, the country’s central bank maintained its interest rates at an all-time high in May, citing expectations for a significant decline in inflation during the first half of 2025.

Further subsidy reductions are anticipated as Egypt continues its economic reforms following a $57 billion bailout from the United Arab Emirates, the International Monetary Fund, and other international supporters.

Cairo-based EFG Hermes is among the institutions predicting a continued cooling of consumer costs throughout the remainder of the year.

Abu Basha noted that the gradual elimination of fuel subsidies and potential increases in power tariffs are expected to have a relatively minor effect on overall inflation.

However, recent shortages in domestic gas supplies, which caused temporary shutdowns at some fertilizer plants and contributed to widespread power cuts, remain a potential wildcard.

Despite the inflation slowdown, the Egyptian central bank is unlikely to reduce interest rates when it meets next week.

The IMF recently affirmed its agreement with Egypt that maintaining a tight monetary policy is crucial in the short term to bring inflation closer to the central bank’s target.

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Businesses Struggle as Petrol Scarcity Hits Major Nigerian Cities

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NNPC - Investors King

The pervasive impact of a severe petrol scarcity has thrown businesses across major Nigerian cities into disarray as long queues have started showing up at petrol stations.

In bustling urban centers like Lagos, Abuja, and Port Harcourt, scenes of frustrated commuters and distressed business owners paint a stark picture of the toll exacted by the ongoing fuel crisis.

Many petrol stations have either completely run out of fuel or are rationing limited supplies, forcing consumers to endure hours-long waits or turn to black market sellers who command prices as high as N1,000 per litre.

For Uche Adams, a Lagos-based trader, the petrol shortage has brought his business to a standstill for days.

“I have been out of business for two days because I have not been able to buy petrol,” lamented Adams, reflecting the widespread impact on small businesses reliant on transportation and generator power amidst erratic electricity supply.

The situation is equally dire in Abuja, where Adamu Abdullahi, operating a barber’s shop in Kubwa, described how the scarcity has slashed his operating hours and inflated his overhead costs.

“I have only operated for five hours today due to fuel scarcity. I can’t buy at any filling station and black marketers are selling higher than N1,000 per litre,” Abdullahi disclosed.

Behind the scenes, private depot owners in Lagos have exacerbated the crisis by hiking petrol prices from N630 to N720 per litre, citing logistical challenges and market dynamics.

This spike in prices at the source has cascaded down to consumers, with filling stations adjusting their rates upwards, compounding the financial strain on businesses and households alike.

The Nigerian National Petroleum Corporation (NNPC) has attributed the fuel scarcity to disruptions in ship-to-ship transfers during adverse weather conditions, which have hampered product deliveries to filling stations.

Olufemi Soneye, NNPC’s chief corporate communications officer, acknowledged the logistical hurdles exacerbated by recent thunderstorms and flooding on truck routes, hindering the smooth flow of petrol supply.

“Weather disruptions have affected berthing at jetties, truck load-outs, and transportation of products, compounding station supply logistics,” stated Soneye.

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