READ What President Buhari said would happen to Electricity Tariffs as Power gets Stable
President Muhammadu Buhari has said that his government would
only raise electricity tariffs when
stability is achieved in the power sector. He stated that
government was working to improve power generation and
distribution from its current state.
only raise electricity tariffs when
stability is achieved in the power sector. He stated that
government was working to improve power generation and
distribution from its current state.
This was even as he stated that there was no assurance that the
government would approve the lifting of restrictions imposed on foreign currency by the Central Bank ofNigeria, CBN.
government would approve the lifting of restrictions imposed on foreign currency by the Central Bank ofNigeria, CBN.
President Buhari spoke through his Vice, Professor Yemi Osinbajo who
represented him as the special guest of honour at the annual
general meeting of the Manufacturers Association of
Nigeria, MAN, yesterday.
represented him as the special guest of honour at the annual
general meeting of the Manufacturers Association of
Nigeria, MAN, yesterday.
He said: “At this point, if we wanted to have a cost effective
tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain – from
generation down to distribution- a
cost effective tariff.
tariff, the only way is to service that core value chain, the only way is to ensure that we are paying and compensating the value chain – from
generation down to distribution- a
cost effective tariff.
“Power is of course crucial and as the president said in his inaugural address, to which President Mbeki
referred, the question of power is one that is absolutely crucial to
manufacturing and practically everything else and we shouldn’t be rejoicing at
4000 Megawatts of power. But the
problems are historical and several
of those problems will need tackling head on, on a day-by-day basis.
referred, the question of power is one that is absolutely crucial to
manufacturing and practically everything else and we shouldn’t be rejoicing at
4000 Megawatts of power. But the
problems are historical and several
of those problems will need tackling head on, on a day-by-day basis.
“One aspect of the problem that I want to speak about, because this also affects manufacturing, is the
whole idea of the tariffs. Of course
the president of MAN just said that we have one of the most expensive electricity in the world.
whole idea of the tariffs. Of course
the president of MAN just said that we have one of the most expensive electricity in the world.
“Now, the truth of the matter is
that at this point, if we wanted to have a cost effective tariff, the only way is to service that core
value chain, the only way is to ensure that we are paying and compensating the value chain –
from generation down to distribution- a cost effective
tariff.
that at this point, if we wanted to have a cost effective tariff, the only way is to service that core
value chain, the only way is to ensure that we are paying and compensating the value chain –
from generation down to distribution- a cost effective
tariff.
“You cannot have that cost effective tariff without some pay.
At the moment, (when you compare) how much it costs to
producepower, and the amount of power that is generated, the losses on account of distribution are significant. In some cases you have up to 40% losses in
distribution, and of course it is the
DISCOs that have to take that burden.
At the moment, (when you compare) how much it costs to
producepower, and the amount of power that is generated, the losses on account of distribution are significant. In some cases you have up to 40% losses in
distribution, and of course it is the
DISCOs that have to take that burden.
“The GENCOs (generating companies) are producing power
but they expect to be paid for all the power that they produce. Now,
if 40% of this is lost, it means the DISCOs cannot collect 40%, but they have to pay for it somehow. So
government has to come in and play some kind of role in order to ensure that the whole value chain is paid for.
but they expect to be paid for all the power that they produce. Now,
if 40% of this is lost, it means the DISCOs cannot collect 40%, but they have to pay for it somehow. So
government has to come in and play some kind of role in order to ensure that the whole value chain is paid for.
“But the most important thing is
that the cost of power is reflective of costs that have to be
borrowed at every stage of the
value chain and today the cost of power, if it’s going to be reflective in any way is simply what it is. It
will be very difficult indeed, except
if we are going to introduce yet
another subsidy and by the way, a
fair amount of that goes on already in the way that government supports the GENCOs
and the DISCOs.
that the cost of power is reflective of costs that have to be
borrowed at every stage of the
value chain and today the cost of power, if it’s going to be reflective in any way is simply what it is. It
will be very difficult indeed, except
if we are going to introduce yet
another subsidy and by the way, a
fair amount of that goes on already in the way that government supports the GENCOs
and the DISCOs.
“But I think that we must be ready
to accept that for a while, until things stabilize somewhat, tariffs cannot remain at the levels at
which they are today, they cannot
remain at that level, and that just simply is the truth of the matter.
It certainly means that there may
be higher costs, but I don’t think
that an option of not having power is really what we want. The
real issue of course is that at the end ofthe day, some of the cost
goes to the consumer, but a cost reflective tariff is an absolute
necessity, otherwise, privatization
and all of that simply doesn’t make sense.”
to accept that for a while, until things stabilize somewhat, tariffs cannot remain at the levels at
which they are today, they cannot
remain at that level, and that just simply is the truth of the matter.
It certainly means that there may
be higher costs, but I don’t think
that an option of not having power is really what we want. The
real issue of course is that at the end ofthe day, some of the cost
goes to the consumer, but a cost reflective tariff is an absolute
necessity, otherwise, privatization
and all of that simply doesn’t make sense.”
The President also made it clear at
the meeting that a review of the
CBN restrictions on foreign currency was not imminent. His
words: “I want to make it absolutely clear that the position is not that a review of the CBN restrictions on foreign exchange is imminent. It is
a short term measure, not a policy,
and as things improve, we will
have a discussion about what to do. But certainly note that a review is about to take place”, he said.
the meeting that a review of the
CBN restrictions on foreign currency was not imminent. His
words: “I want to make it absolutely clear that the position is not that a review of the CBN restrictions on foreign exchange is imminent. It is
a short term measure, not a policy,
and as things improve, we will
have a discussion about what to do. But certainly note that a review is about to take place”, he said.
Source:
VANGUARD
EmoticonEmoticon