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Int’l, Bilateral Electricity Consumers Fail to Pay N4.71bn Bill to Nigeria, NERC Reveals

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Power - Investors King

Nigerian Electricity Regulatory Commission (NERC) has disclosed that ten international and bilateral power consumers that get supply from Nigeria have failed to pay for the electricity they have consumed for the last six months.

Figures released by NERC pointed out that these special power consumers are owing Nigeria about N4.71bn.

According to findings, these 10 international, bilateral and special power consumers of Nigeria failed to remit the sum within a period of six months notwithstanding the huge profits they have been making in their respective organisations.

Making these disclosures n its first and second quarter reports of 2022, NERC also identified the debtors to include Odukpani-CEET, Paras-SBEE, Ajaokuta Steel, and Mainstream/Inner Galaxy.

Other debtors are Mainstream/KAM Industries, Mainstream/KAM Integrated, KAM Steel Shagamu, NDPHC/Sunflag, North South/OAU, and Mainstream/Adefolorunsho Ventures.

The commission further stated that the indebtedness by the power firms were to the Nigerian Bulk Electricity Trading Company Plc and the power Market Operator.

According to the electricity regulator, in the first quarter, moribund Ajaokuta Steel Company Limited failed to pay N0.45bn, while Odukpani-CEET did not remit $3.42m.

NERC, while commenting on remittance by special and international customers stated that its summary indicated that Ajaokuta Steel Co. Limited and its host community didn’t pay for the electricity that was supplied to them.

The commission said, “no payment was made by the special customer – Ajaokuta Steel Co. Ltd and the host community, in respect of the N0.38bn and N0.07bn market invoices issued by NBET and MO respectively in 2022/Q1.”

“In the same period, bilateral customers, Paras-SBEE, Transcorp-SBEE, and Mainstream NIGERLEC received invoices of $2.72m, $2.74m and $4.61m from the MO and each remitted $2.72m (100 per cent), $2.74m (100 per cent), and $4.52m (98 per cent) respectively.

“Odukpani-CEET received an invoice of $3.42m from the MO during the period but no payment was made by this customer. The non-settlement of market obligations by this category of market participants should push MO and NBET to activate relevant safeguards for remittance shortfalls.”

In the second quarter, the commission said Paras-SBEE did not pay $2.39m; Odukpani-CEET, $2.03m; Ajaokuta Steel, N0.34bn; while seven other bilateral customers did not remit N0.37bn.

A summation of the total debt in dollars during the six-month period was $7.84m (N3.55bn at the official exchange rate of N453.1/$), while the total debt in naira was N1.16bn, hence the cumulative indebtedness of all the debtors stood at N4.71bn

Similarly, in the section on remittance by international, special and bilateral customers in the second quarter, the NERC pointed out that, “international customers, Transcorp-SBEE and Mainstream-NIGERLEC received invoices of $2.42m and $5.56m respectively from MO and made remittances of $2.42m (100 per cent) and $5.54m (99.64 per cent) respectively in 2022/Q2.”

“These customers had 100 and 98 per cent remittance performance respectively to the MO in 2022/Q1. However, no remittance was made to the MO by Paras-SBEE and Odukpani-CEET for invoices of $2.39m and $2.03m respectively,” it added.

NERC acknowledged that Paras-SBEE had 100 per cent remittance to the MO in 2022/Q1, but stressed that no remittance was made by Odukpani-CEET in 2022/Q1.

The commission added that, “bilateral customers including Mainstream/Inner Galaxy, Mainstream/KAM Industries, Mainstream/KAM Integrated, KAM Steel Shagamu, NDPHC/Sunflag, North South/Star Pipe, North South/ OAU, Mainstream/Adefolorunsho Ventures received invoices of N505.68m, N24.19m, N117.23m, N153.03m, N19.54m, N18.36m, N22.39m and N35.2m respectively from the MO in 2022/Q2.”

Meanwhile, Investors King gathered that NERC has been making efforts to get the debts settled.

It could be recalled that the lack of payment of electricity bills by consumers has become a source of worry for regulators.

Most Nigerians who are yet to be metered had always invented illegal means of evading remittance of their bills. To curb this, NERC has been increasing availability of meters to consumers and ensure that era of estimated billing is erased.

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Economy

Nigeria’s Plan to Review Oil Companies’ Gas Flaring Strategies

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Oil

Nigeria is ramping up its efforts to address environmental concerns in the oil and gas sector with a comprehensive plan to review gas flaring strategies of international and indigenous oil companies.

The Minister of State for Environment, Dr. Iziaq Salako, announced this initiative during a national stakeholders engagement meeting on methane mitigation and reduction held in Abuja, Investors King reports.

Gas flaring, a common practice in the oil industry, releases methane—a potent greenhouse gas—into the atmosphere, contributing to climate change and posing health risks to communities near oil facilities.

Nigeria aims to end routine gas flaring by 2030, aligning with global climate goals and commitments.

Dr. Salako explained the importance of reducing methane emissions and highlighted the detrimental effects on public health, food security, and economic development.

He outlined practical steps being taken to tackle methane emissions, including the development of methane guidelines and the engagement of government institutions.

The ministry, through the National Oil Spill Detection and Response Agency, will conduct periodic reviews of oil companies’ plans to ensure compliance with the gas flaring deadline.

Deloitte management consultants will assist in conducting comprehensive forensic audits to scrutinize the legitimacy of forward-contracted transactions.

President Bola Tinubu’s commitment to environmental sustainability underscores the government’s dedication to addressing climate change and fulfilling its multilateral environmental agreements.

The engagement event served as a platform for stakeholders to discuss methane mitigation strategies, existing policies, and implementation challenges.

Collaboration and dialogue among diverse sectors are crucial in charting a unified course towards sustainable methane reduction in Nigeria’s oil and gas industry.

As the country navigates its environmental agenda, ensuring accountability and transparency in gas flaring practices remains paramount for achieving a greener and healthier future.

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Economy

Interest Rate Jumps to 24.75% as CBN Takes Aggressive Stance Against Inflation

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Dr. Olayemi Michael Cardoso

The Central Bank of Nigeria (CBN) has announced a significant increase in the monetary policy rate, known as the interest rate, to 24.75%.

This move disclosed by CBN Governor Olayemi Cardoso during the 294th Meeting of the Monetary Policy Committee press briefing in Abuja, represents a bold step by the apex bank to address the mounting inflationary pressures faced by the country.

With inflation soaring to 31.70% in February, the CBN aims to moderate this upward trend by tightening its monetary policy stance.

This decision follows the previous hike in the interest rate to 22.75% in February, showcasing the CBN’s commitment to combatting inflationary forces.

While the bank opted to maintain the Cash Reserve Ratio at 45%, the significant increase in the interest rate underscores the urgency of the situation and the need for decisive action.

Governor Cardoso emphasized that these measures are essential to stabilize the economy and safeguard the purchasing power of the Nigerian currency.

The 294th MPC marks the second meeting under Governor Cardoso’s leadership, indicating a proactive approach to addressing economic challenges.

The next MPC meeting is scheduled for May 20th and 21st, 2024, highlighting the ongoing commitment of the CBN to navigate Nigeria’s economic landscape amidst inflationary pressures.

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Economy

Nigeria Braces for 10th Consecutive Interest Rate Hike by Central Bank

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Central Bank of Nigeria (CBN)

As Nigeria grapples with persistently high inflation, the Central Bank of Nigeria (CBN) is gearing up to implement its tenth consecutive interest rate hike in a bid to curb the soaring prices and attract investment.

Analysts surveyed by Bloomberg are anticipating a substantial 125 basis-point increase in the key rate to 24%, marking one of the most significant adjustments in the current tightening cycle.

The decision, expected to be announced by Governor Olayemi Cardoso on Tuesday at 2 p.m. in Abuja, comes on the heels of inflation accelerating to 31.7% in February, far surpassing the central bank’s target range of 9%.

This surge has been primarily attributed to the sharp depreciation of the naira, prompting authorities to devalue the currency twice since June to narrow the gap with the unofficial market rate and encourage investor confidence.

While these measures have seen the naira strengthen in recent days and bolstered investment inflows, including a fourfold increase in overseas remittances and significant foreign investor portfolio asset purchases, there remains a palpable need for more decisive action.

Giulia Pellegrini, a senior portfolio manager at Allianz Global Investors, emphasized the necessity for the CBN to intensify its tightening efforts to regain foreign investors’ confidence in the local bond market.

While acknowledging the positive strides made by the central bank, Pellegrini stressed the importance of a more assertive approach to prevent the diversion of investor attention to other frontier markets.

As the Nigerian economy navigates through these challenging times, the impending interest rate hike signals the CBN’s determination to address inflation head-on and foster a more stable economic environment.

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