Oil & Energy
‘High Electricity Tariff Frustrating e-Commerce Growth’
Operators of e-com
merce companies have cried out over the negative effect of high electricity tariff, describing it as a disincentive to business development in the country.
A survey conducted by the Association of Nigerian Electricity Distributors (ANED) shows that less than 40 per cent of electricity bills are paid by consumers and that as a result higher tariffs are expected to be levied in a bid to plug the loss in power revenue.
The stakeholders stated that with a recession poised to sweep through the economy, an unstable currency washing out capital security and epileptic power supply, forcing a dependence on generators, the hike in electricity tariffs will limit industry growth.
The managing Director of Jovago Nigeria, Mr Kushal Dutta, said, “one of the highest cost e-commerce companies in Nigeria cover is electricity. As online-based businesses need constant power supply to function and deliver services to clients, we spend a bulk of our revenue which should go into increasing operations on buying diesel for generators that run almost 24 hours a day.
“Although we predict better market opportunities for the sector, there is need to curb this inflation in tariff pricing so investing companies can begin to thrive and achieve real growth,” Dutta said.
While consumers of power bemoan the instability and high cost of sourcing electricity, the Executive Director, ANED, Sunday Oduntan, said that the high charges were dismissible in view of the low payment habits of Nigerians.
Oduntan said consumer pay less than 40 percent of their actual bills from recording by distribution companies.
“I ‘ve toured all the 11 DISCOs and I see the same pattern across board in terms of our peoples’ attitude with respect to N5,000 and they will pay N2,000 and will tell you they will clear in next time. This is how it continues to pile up.”
With the government removing fuel subsidies and oil marketers refusing to sell diesel at pump princes, the cost of doing business in Nigeria is expected to double over the next three months especially as oil hits a bench mark price of $ 38 per barrel with the International Monetary Fund (IMF) predicting a further drop to $ 20 per barrel by mid-year.
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Oil & Energy
Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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