The Nigerian Government has estimated petrol subsidy payments up to N6.72 trillion for full-year 2023.
Nigerians have been experiencing improved power supply in recent weeks as buttressed by data from the Transmission Company of Nigeria (TCN).
The daily tracker of Electricity generation in Nigeria shows supply peaked at a record high of 5,043 megawatts (MW) on Thursday, 1st September 2022, an 8.1% increase when compared to 4,664MW recorded a day before.
Electricity supply has been on an upward trend since the labour union strike action earlier in August, where electricity workers under the aegis of the National Union of Electricity Employees (NUEE) and the Senior Staff Association Electricity and Allied Companies (SSAEAC) grounded the operations of the TCN, leading to a nationwide blackout, a move which saw DisCos lose an estimated N2.94 billion in potential revenue.
In the month of August, an average of 93,183MWh of electricity was supplied to consumers, as against an average of 86,221MWh sent out in the previous month. In the same vein, energy production has also been ramped up with a daily average generation of 94,281.68MWh in August.
Meanwhile, on the first day of September, a total of 102,875.3MWh of energy was generated, while 101,630MWh was supplied, representing 98.8% of the total generated electricity. Furthermore, the highest frequency recorded on Thursday was 51.1Hz, while the lowest frequency was 49.8Hz.
Some Nigerians who spoke to Nairametrics have expressed some level of satisfaction with the recent stability in the electricity supply in their areas, while some feared it could affect their transformers. Here is what they are saying:
According to Taibat Towoboade who lives in Ikodoru, Lagos State, she explained that they now enjoy 23 hours of uninterrupted power supply in her house daily, which usually was around 15 hours of interrupted supply.
“Usually, I would be worried to charge my gadgets and appliances, but lately, I do not have to worry about that, as it is almost certain that there will be light, and would only go off for 1 hour during the day,” she said.
Tunde Akinyele a resident in Ogun State also noted the better state of power supply in his area. “To my surprise, we now have light for about 7 to 8 hours daily, that is like a miracle because it is usually about 3hrs in a day at best,” he said.
“Although this comes with a downside, because now our transformers and cables are easily spoilt, when the power stays for longer than usual, which would take about two days before it is being repaired,” he added.
Miss Omolabake, who lives in Agbado, Lagos State said she had a power supply for four days uninterrupted, which is something hardly seen in her area.
On the other hand, a Twitter user with the account name @Maiomoko posted that some people living in Abuja allegedly complained to the Abuja Electricity Distribution Company (AEDC) that the improved power supply is affecting their businesses.
The post reads: “I heard some people somewhere went to complain in AEDC office that the regular power supply now is detrimental to their businesses. In Nigeria, by Nigerians.”
While reacting to the post, @ayobamibe said, “How will phone charging, petrol sales, and generator repair sell well if there is constant light?” another said, “Omo whatever they did to our light is working, generator noise has reduced well enough to say thanks to those in charge of electricity.”
Why power is improving
Reports reaching Nairametrics indicate some of the reasons for improved power supply are not unconnected to some of the recent policy changes introduced earlier in the year.
Tariff Adjustments
A reduction in tariff shortfalls which has been the bane of investments in the power sector has also been a major factor in improved power supply.
The first is the frequent increase in electricity tariffs which now complies with the requirements of the Multi-year Tariff Order (MYTO).
Before now, electricity tariffs are increased only after the approval of the government leading to tariff subsidies or tariff shortfalls that have plagued the industry.
However, since a policy review was conducted tariffs are increased every six months allowing the sector operates at a cost-reflective tariff.
Partial Activation
Industry sources also point to the Partial Activation of Power Purchase Agreements (PPA) which commenced in July as a major factor leading to an improved power supply.
Sources explain that Partial Activation requires players in the sector to meet their minimum requirements.
For example, the Power Generating Companies must generate as much power as is available in their contracted capacities. Failure to generate contracted power means they pay penalties.
When power is generated, the Transmission company must be able to evacuate and wheel all the power generated. If they do not wheel all the power, they face penalties.
And when power is wheeled, the distribution companies are expected to distribute all the power wheeled to them. Failure to meet that requirement exposes them to penalties.
Details of the partial activation are detailed in this report from Oak Legal.
The final reason adduced for the improved power supply is billions of naira in central bank intervention funds lent to Discos for meters, CAPEX, and operational expenses.
