Nigerians spent N6.5trn on fuelling generators in 2017- Investigation

Nigerians spent N6.5trn on fuelling generators in 2017- Investigation

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Despite claims by the Federal Government that power distribution increased from 2,690Megawatt in 2015 to 5,000MW by the end of 2017, Nigerians spent about N6.5trillion last year to fuel their generating sets, The Point’s investigations have revealed.
Findings revealed that generating sets, especially those used by industries and banks across the nation, consumed between 100 and 300 litres of fuel or more on a daily basis, after automobiles in Nigeria, owing to constant irregular power supply. 
Also, The Point found that the average hours of power supply availability to state capitals and major cities in the nation dropped by over 50 per cent within the period under review.
For instance, while average hours of supply to registered consumers in the Federal Capital Territory, Nasarrawa, Niger, Kogi (Abuja Distribution Company) dropped from 20 to 15, supply to their counterparts in Edo, Delta, Ondo, Ekiti (Benin Disco); Lagos South (Eko Disco), Lagos North (Ikeja Disco); Oyo, Ogun, Osun, Kwara (Ibadan Disco) dropped from 16 to 11, 13 to 8.4, 16 to 10 and 12 to 6 hours, respectively.
Others like Yola, Yobe, Borno, Taraba (Yola Disco); Kano, Jigawa, Katsina (Kano Disco); Plateau, Bauch, Gombe, Benue (Jos Disco), and Cross river, Akwa Ibom, Rivers, Bayelsa (Port Harcourt Disco), also witnessed a drop, from 10 to 5.1; 15.2 to 8.1; 16 to 13.1; and 23.1 to 20.2 hours, respectively.
 
N6.5 TRILLION HOLES IN BANKS’, MANUFACTURERS’, RESIDENTS’ POCKETS
 
Aside from about 70 million homes, offices and residents of the President and Vice President, members of the National Assembly, Federal and state government ministries, as well as the 36 Governors that spent over N2 trillion to fuel and maintain generators in 2017, the organised sector also spent whopping sums to generate electricity in their headquarters and branches across the nation.
The manufacturing sector appears to be the worst hit in the country. Despite the claims by the Federal Government that industries benefitted more from the increased power supply in 2017, operators in the sector are aggrieved over the expenses incurred in fueling, maintaining of generators and provision of alternative sources of power.
According to a survey conducted by the Manufacturers Association of Nigeria, which was obtained by our correspondent, manufacturers (both Small and Medium Enterprises and large firms) spent over N4 trillion on fuel and maintenance of generators and alternative power sources in the last one year.
A further analysis of the the yet-to-be released result indicated that manufacturers spent over N2 trillion on fuel, maintenance of generators and independent power generation in the first half of 2017 as against a little over N1 trillion spent in 2016, showing an increase of about N1 trillion.
This spending also increased by about N2 trillion at the end of the second half of 2017.
To curb further losses, MAN is set to increase the number of its members on its own Independent Power Project scheme before the end of 2018 by using the Manufacturers Power Development Company as a vehicle to achieve the gradual transition from dependence on distribution companies for electricity to its IPP.
The Chairman, Economic Policy Committee, MAN, Reginald Odiah, said, “Our partnership with ASB Valiant Company will birth reliable power to manufacturing outfits on agreed terms as this will go a long way to cut down undue expenditure and the extra cost in providing alternative means for power generation incurred by manufacturers in the country.
“This is the time to break the monopoly of the power generation and distribution in the country, as MAN is engaging several stakeholders to achieve this objective.”
While the manufacturers have identified ways to block the holes in their pockets, their counterparts in the banking sector are still battling with the menace of irregular power supply.
Except for a few of them that explore opportunities in solar energy as an alternative source, most of the branches of the financial institutions rely solely on power generating sets.
Research shows that each of over 7,500 branches across the nation has two generating sets and one of them consumes between 60 and 100 litres of fuel (at N210 per litre) on a daily basis. The huge cost was not only as a result of the increased cost of diesel, but also the cost of spare parts for the generators, which rose by over 100 per cent.
The telecommunications sector also suffered huge cost of providing electricity to their mast sites, offices and outlets across the nation.
Aside from paying over 30 states a sum of N190 billion on their infrastructure across the country, the five operators in the sector spent an average of N120 billion on power generation in their offices, outlets and mast sites in 2017.
 
OUR SALES ROSE BY 100% – GENERATOR DEALERS
 
A recent report released from a global market research and consulting firm, Navigant Research, revealed that the global revenue from diesel stood at $41.2 billion and the figure is largely driven by Nigeria, India, Chile and South Africa, among others.
The development was confirmed by a sales executive in JMG Limited, the major distributor of FG Wilson, GE, Mitsubishi generators, Mr. Femi Aina, who told our correspondent that diesel generating sets had historically been the leading baseload distributed generation technology, particularly in countries with frequent black out.
According to him, JMG products, in the last one year, explored the expanded opportunities thrown open by irregular power supply in the country.
He said, “We explored opportunities among homeowners, religious centres, commercial facilities like hospitals, data centres, banks that require mission-critical power in the event of a grid outage. The irregular power supply boosted sales of our generators and spare parts by about 100 per cent compared with what we recorded in 2016, which only rose by 50 per cent, when compared with our figures in 2015.”  
 
REVIEW REFORM, DEBTS, EQUITY- Experts
 
To attract more investors in the power sector and boost power supply, the Chairman, Power Sector Group, Lagos Chamber of Commerce and Industry, Mr. Effiong Edet, has advocated the need for the Federal Government to review the privatisation of the power sector, refinance of debts and government’s 40 per cent equity in electricity distribution companies.
He said, “Government must ensure enforcement of prepaid meters, cost-effective tariff, decentralisation of the transmission system, and increased engagement between the government and stakeholders in the sector.
“There is a need to reduce fortunes spent on alternative sources of power and that can be achieved with a more robust engagement and regulation of the sector. Statistics have shown that the country generates about 6,700 megawatts of electricity, and out of it, 2,000 is wasted because of the problem associated with phishing and distribution.”
The Chairman, Blue Diamond Group, Mr. Uzoma Mbisiogu, explained that without constant and efficient power supply, Nigeria would continue to lag behind in industrial development.
Mbisiogu, who recently partnered the Nigerian Embassy in China to invite a group of Chinese investors to the country, said the state of power supply in Nigeria was rather embarrassing, considering the huge funds pumped into the sector by the Federal Government.
He said, “The consequence is more a decrease in economic activities and social comfort of Nigerians. The degree of adversity Nigerian citizens and companies face on a daily basis is counter-productive and we must all join hands to address the factors militating against the realisation of adequate and steady power supply in the country.
“For enviable economic growth and wooing of more foreign investors, we need to quickly strategise on how to ensure constant power generation in the country and the sooner we do that, the better we would be on the path leading to industrial development and much more. It is sad to know that Nigerians have become so used to the situation that they now see it as the normal thing and this is not the case in most countries abroad.”
 
WE’RE WORKING HARDER TO SATISFY NIGERIANS – MINISTER
 
However, the Minister of Power, Mr. Babatunde Fashola, has assured Nigerians that his ministry is working harder to ensure all firms and Nigerians access regular power supply.
He told our correspondent, on Twitter, that the nation was blessed with additional 2, 000MW.
He said, “Manufacturers should let us know where they are, how much power they need, and how we can connect them because we have 2,000 MW of undistributed power. The ministry is working harder to provide adequate power to Nigerians and ensure pre-paid metres are provided to reduce the incidents of estimated billing.”

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