As the Federal Government sets yet another target, next October for stable power supply, the announcement by Petroleum Resources Minister, Diezani Alison-Madueke, that Nigerians may witness another hike in electricity tariffs, without any corresponding improvement in power supply to justify another increase, is outright provocation and unfair to Nigerians who are being compelled to pay more for darkness. Coming in the wake of last year’s hike under the new tariff regime – Multi-Year Tariff Order (MYTO) – the planned hike which is expected to continue every year until 2016 is insensitive, anti-people and unacceptable and should be shelved in the interest of peace and stability. Nigerians need a respite from the unbearable economic hardship in the country. Before government apologists echo the usual refrain that the problems in the power sector predate the Jonathan administration, may we quickly remind them that Mr. President has had ample time to improve the situation, but he has failed to do so, despite repeated promises. In short, what Nigeria is witnessing is a crisis in the power sector, created by failure of governance.
Speaking last Saturday in Abuja, Alison-Madueke submitted that inadequate infrastructure for gas supply has been the bane of the sector since it was privatized. The Minister stressed that while the detailed tariff is being worked out, the Ministries of Petroleum Resources and Power, Central Bank of Nigeria, the Nigerian Electricity Regulatory Agency (NERC) and the Nigerian National Petroleum Corporation (NNPC) are working together to find a lasting solution to the problem. “A review of gas pricing is now being implemented to further reflect market value. In the short term, it is anticipated that this will quickly boost gas supply and in turn power output. In the medium to long term, this new price regime should trigger additional investment in the infrastructure for gas to power,” she said.
This is insane, amid the worrying disclosure by former Power Minister, Chinedu Nebo that as many as 120 million Nigerians (out of a population of 160 million) are currently without electricity. The logic of hiking tariff as a precondition for investor participation, is unjustifiable, and certainly, not in the national interest. The burden on citizens is enormous, as they also have to battle with scarcity and high cost of kerosene, diesel and cooking gas. If the hike is aimed at pleasing investors, it subjects Nigerians to more suffering, indeed double jeopardy. People should not pay for what is non-existent. The ideal thing is to work towards putting power first. Thereafter, it would be clear to all and sundry that there is a change that could warrant tariff increase. As it is, there is no guarantee that after subjecting consumers to high charges, there would be commensurate increase in power supply, which is what Nigerians want.
The Power Ministry recently confirmed that total power generated stood at 1,939MW on June 19 as against 3,277 MW wheeled to the DISCOS four days earlier or the peak 4,517MW generated by the unbundled Power Holding Company of Nigeria (PHCN) in December 2012. The sharp drop in power generation was attributed to the shutdown of the Utorogu and Ughelli East gas plants as a result of vandalism. Alison- Madueke highlighted that field expansion of the Utorogu, and other gas plants and drilling of new wells would unlock an additional 370 mcf per day, which will then assure the delivery of about 5,000 megawatts (including hydro) within the four-five months to the year end. Pertinently, the public has hitherto been made to believe that electricity generated by the defunct PHCN suffered wide fluctuations because of hiccups in the volume of gas supplies owing to failure to promptly settle gas bills that had fallen due. But with PHCN utilities privatized to stem inefficiency; why has there been no much yearned-for improvement in the power generated and distributed? Are the privatized utilities also not paying for gas consumed as and when due?
As Nigerians bemoan high electricity charges, the fundamental question remains; why against all entreaties, should the federal government, increase electricity tariff without any commensurate increase in power supply? The MYTO tariff schedule showed that consumers are paying higher on two fronts – the fixed cost and the cost per kilowatt of electricity have all increased. There is no justifiable basis for consumers to pay for what is not available. There is also no justification for compounding the people’s poverty and misery, by imposing on them an increased tariff to compensate an inefficient system. At our pathetic level of underdevelopment, hiking tariffs without a corresponding increase in power supply is immoral. That is official daylight robbery; aiding and abetting the exploitation of Nigerians by charging them higher tariff when electricity supply remains erratic, all in the name of transforming the power sector. Government ought to be worried about public summation that the greatest evidence of leadership failure is the embarrassing state of public power supply.
It certainly requires no magic to give Nigerians constant power supply. The excuses from government for the dismal performance can sometimes be as unpardonably hare-brained as they are laughable. Underlying all these excuses, Nigeria needs a relatively puny $6 billion to invest in the oil and gas sector. The country currently has about $24 billion lying idle and which should be invested in priority national projects. After deducting funds in the excess crude account, the balance of the external reserves currently amounts to over $24 billion. The Federal Government should use these funds for critical infrastructural and economic projects. The Jonathan administration should urgently begin to build a national gas grid that is wholly Nigerian-owned or executed in partnership with credible private sector players in the sector within a public-private partnership. The grid can be put in place within four years, and should have capacity to handle gas volumes far in excess of the present limited domestic and regional demand. Such gas infrastructure will stimulate further domestic demand for expanding electricity requirements and various industrial purposes as well as facilitate domestic gas competition.
In his inaugural address on May 29, 2011, the president promised that power sector reform was at the heart of his administration’s industrialization and transformation agenda. At that time, power generation was about 3,500 MW. Three years after, and billions of naira voted for it, this miserable figure has increased by no more than an even more miserable 1,000 MW. According to the Nigeria Vision 2020 Economic Transformation Agenda, “the overall target for the power sector is to grow installed power generation capacity from 6,000MW in 2009 to 20,000MW by 2015 and 35,000MW by 2020”. Needless to state, the 2009 target has yet to be achieved in 2014. In any case, it is fraudulent to make people pay for capacity, rather than what is produced or consumed. It is important to state that President Goodluck Jonathan must deliver on his critical promises to transform the power sector for history to judge him fairly. As far as power supply is concerned, the dark days are, sadly, far from over.
