Nigerians Spend N796bn to Fuel Generators Yearly

NIGERIA – In an era when the rest of the world is investing in “GREEN TECHNOLOGY”, Nigerians spend about N796.4 billion on fuel to generate electric power every year, the National Electricity Regulatory Commission (NERC) has said.

This figure is strikingly similar to the federal budget of N796.7 billion for capital expenditure for the current fiscal year. A breakdown shows that N540.9 billion is spent on diesel and N255.5 billion goes into the purchase of petrol annually for power generating sets.

These facts were contained in a document authored by Assistant General Manager, Project Monitoring Office, Ify Ikeonu. Although all the details were not available at press time, THISDAY investigations show that of the amount, industries operating under the aegis of Manufacturers Association of Nigeria (MAN) spend over N350 billion to fuel their generating sets.

Early in the year, the Federal Government came under heavy criticism for budgeting N2 billion to buy, maintain and fuel generators this year.

According to the details of the budget passed by the Senate in December 2008, the Presidency will spend N27 million to fuel its generators and N14.3 million to maintain them.

Other details were: the National Assembly, fuel, N233 million; National Assembly Office -fuel- N63 million; maintenance, N57.2 million; the National Assembly White House, which houses Chambers of the Senate and the House of Representatives – N58 million for fuelling and N55 million for maintenance; the National Assembly Service Commission (NASC), fuel and maintenance – N25.8 million; and Police formations nationwide – fuel and maintenance, N110 million.

THISDAY did not gain access to the number of generating sets currently in use in the country as contained in the survey report. There was also some controversy over the actual estimate of what Nigerians spend to fuel their generators because of a recent report that the entire amount was N50 billion. It has since emerged that the recently reported figure was for Aba, Abia State, alone.

THISDAY gathered that the amount concerning the monetary value of fuel used in Aba was contained in the report of a survey commissioned in 2007 by Geometric Power, Aba. The survey was conducted by National Rural Electricity Cooperative Association (NRECA) in Washington, U.S.A.

Making the clarification about the amount spent by consumers in Aba in the course of THISDAY investigation,  Senior Manager, Public Affairs, Geometric Power Limited, Oseloka Zikora, said:  “According to statistics, Nigerians spend about N540.9 billion on diesel and N255.5 billion on fuel (petrol) to generate power and not N50 billion as ascribed to Prof Nnaji in newspaper reports.”

According to him, “the (about) N50 billion quoted is only the share of Aba industries, commercial and residential consumers’ expenditure on fuel and diesel to generate power.”

His reference was to a newspaper report which he said quoted the Chairman of Geometric Power, Prof. Barth Nnaji, as saying Nigerians spend about N50 billion for fuel to power their electric generating sets every year.  He said the former Minister had to clarify that aspect because it was understood in some quarters to mean that the figure represented what was spent around the country.

Nnaji had explained at a meeting with the Director-General of Bureau of Public Enterprises (BPE), Dr. Christopher Anyanwu, that the expenditure pattern in fuelling generators was that residents/small commercial entities spend N14.4 billion on generator fuel while the large industries part with N43.2 billion for the same purpose.

However, in the publication, the fact that the figures were limited to the expenditure in Aba was not expressly stated.

Unreliable power supply in the country has seen most households resort to the use of power generating sets as their primary means of electricity, while the state utility company, Power Holding Company of Nigeria, (PHCN), which is essentially a monopoly, hardly meets up to 20 per cent of the nation’s demand. It generates between 2,000mw and 2,500mw. This has led to a situation where power supply from PHCN is viewed as a standby source, to be used when available, while generators are seen as the principal mode of catering for power needs.

To make PHCN more efficient, it was unbundled into 18 successor companies comprising 11 power generating companies, GenCos, six power distribution companies, DisCos, and one transmission company, Transmission Company of Nigeria.  The country is moving towards a situation where other means of generating power that will involve less expensive fuel, such as solar, are being explored.

Although the initial financial outlay in setting up a solar-powered plant is astronomical, it can last for 25 years without fuel other than solar energy which is captured by the solar panel.

The government also recently signed a contract with a French outfit to establish a wind-fuelled plant in Katsina as a mark of its seriousness to diversify public power supply sources from the traditional hydro and thermal to wind, solar and coal, among others.

To improve power supply however, it has been realised that the private sector must play a critical role, which has led to NERC licensing about 29 independent power producers, IPPs, which are in various stages of completion.

A gas master plan has however been put in place to make gas more readily available to fuel the over 70 per cent of power plants that depend on thermal source of energy.

Source – Thisday@2009

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