Oil & Energy

On Melaye’s Power Sector Exposé

Published

8 years ago

November 6, 2017

Senator Dino Melaye, representing Kogi West Senatorial District in the National Assembly (NASS) stirred the hornet’s nest recently as he took a swipe at the Nigeria’s power sector, describing it as reeking of corruption.
Acting on the mandate and directives of the upper legislative chamber, the Kogi-born Senator during plenary, presented a substantial motion on what he referred to as “series of financial abuses in the power sector”.
Apparently securing the nod of his colleagues on the presentation of the motion through a voice vote, Melaye went ahead to expose the alleged financial impropriety within the power sector.
Citing Order 42 of the Senate Standing Rule, Melaye, who is renowned for his knack for controversy drew the attention of his colleagues to the $1.35 billion allegedly squandered within the power sector.
He explained that about $1 billion Eurobond raised in 2003 to fund key power sector projects was allegedly spent by officials of the Ministry of Power without appropriation and feasibility study.
According to him. “In July 2003, the Federal Government raised $1 billion from Eurobond issue, from which $350 million was given to Nigeria Bulk Electricity Trading Plc (NBET), in 2014, this money was stolen in installments”.
He added: “Sometime last year, the ministry of power came up with an idea of a project they called Afam Fast Power to build new generating power plants to add power to our grid, so far $35 million has been spent by the ministry of power on the Afam Fast Power project without appropriation or detailed feasibility study”.
The motion also sought to know how $29 million was purportedly paid to General Electric for turbines, while other firms received $6 million for same project.
Senator Melaye in his vintage hyper critical posture, urged fellow senators to carry out thorough investigation on the matter in line with the anti-corruption fight of the Federal Government.
Senator Melaye’s revelation of the festering rot in the power sector has put the ill-fated sector in the eye of the storm, with its activities now placed under strict public scrutiny.
Lending their analytical views on evolving activities in critical sectors of the Nigerian economy, such as the Nigeria National Petroleum Corporation (NNPC) contract scan, pundits are of the view that the content of Senator Melaye’s motion should not be swept under the carpet.
A Port Harcourt-based lawyer, Barr Barivule Kpobe, who commented on the alleged power sector fraud as revealed by Melaye, said Nigeria power policies over the years have been a mirage.
According to him, “the more you look, the less you see paxiom best portrays the trend of activities in the power sector”.
“The Nigeria power sector has gulped billions of tax payers’ money but various attempts to fix the sector have slipped into institutional fraud and apparent misappropriation of funds”.
A public affairs analyst and Environmental sociologist, Dr Steve Wodu also expressed disappointment over the management of the Nigeria power sector and its attendant embarrassment on the psyche of Nigerians.
Speaking with The Tide in an interview the senior lecturer in the Department of Sociology, University of Port Harcourt, said the rot in the power sector was a reflection of the “tactical institutional failure in the country”.
Wodu noted that Melaye’s revelation was not the first time that such fraud was unearthed in the power sector, noting that the Nigeria power sector has been prone to mismanagement of funds over the years.
According to the university don, the lack of sustainable power supply in the country was the fallout of such institutional mess.
Wodu also picked holes in the anti-corruption campaign of the Federal Government.
He observed that the anti-corruption drag-net is yet to catch up with some people with obvious corruption stains who still move around with impunity.
“The Federal Government should be proactive in its anti-corruption campaign and ensure that the law takes its full toll on any one found to be corrupt, this will make the people to build confidence in the anti-corruption campaign,” he said.
In his view, an expert in renewable energy as alternative source of power supply, Elder Elkanah Hanson faulted Nigeria power policies, describing it as one of the most enduring “colonial legacies” in the country.
Speaking at a public function in Port Harcourt, recently, Hanson said the fraud in the power sector was as a result of unrealistic power policies which Nigeria inherited from the colonial masters without due consideration for the peculiar power demand of the country.
Elder Hanson called for total scrapping of Nigeria’s electricity laws and a paradigm shift to renewable energy as the source of power in the country.
According to him “a renewable energy is more convenient and cheaper to generate. Nigeria has the capacity to generate enough power supply for the entire country through renewable energy, we have to follow the global trend as we cannot orbit independently of the world”.
The expert also called for a total overhaul of the power sector with experts and technocrats taking the centre stage, and decried the present practice in the sector where participation in the sector is driven by political considerations and not expertise and service delivery.
On Melaye’s revelation, he called for the prosecution of all those linked with the scandal no matter how highly placed. In his postulation, a mechanical engineer, Festus Tor, said Nigeria’s economic woe was as a result of the failure of the power sector.
While commending the Federal Government over its efforts in reforming the power sector, he called on the Senate to carry out a thorough investigation on the alleged mismanagement of fund meant for the actualisation of the Nigeria Integrated Power Project (NIPP).
Tor also urged the government to encourage local technocrats and entrepreneurs through the provision of incentives to foster a more home driven and efficient power policy.
“Nigeria is a very big economy, and the only way we can compete with the rest of the world is through sustainable power supply. Nigeria technocrats should be encouraged to play key roles in policy formulation and implementation in the power sector”.
Tor also called for the review of the Nigeria power sector with proper involvement of states in the generation, transmission, and distribution of power.
An analyst, Mr Fidelis Nwiyor, who also spoke on the issue, commended Senator Melaye and the Senate in general over their move to investigate the management of the $1 billion Eurobond by the ministry of power.
He said the recent probe of the power sector by the Senate will test the strength and commitment of the National Assembly towards checkmating the appropriation and disbursement of public fund.
However, some analysts are also skeptical over the fact that Melaye’s motion might as well be another antic of the Senate to continue their intermittent feud with the executive.

Oil & Energy

No Subsidy In Oil, Gas Sector — NMDPRA

Published

1 week ago

September 8, 2025

The Tide

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said there are no subsidies in the oil and gas sector as Nigeria operates a completely deregulated market.

The Director, Public Affairs Department, NMDPRA, George Ene-Italy, made this known in an interview with newsmen, in Abuja, at the Weekend.

Reacting to the recent reports that the Federal Government has removed subsidies or increased the price of Compressed Natural Gas (CBG), Ene-Italy said, “What we have is a baseline price for our gas resources, including CNG as dictated by the Petroleum Industry Act”.

He insisted that as long as the prevailing CNG market price conforms to the baseline, then the pricing is legitimate.

Furthermore, the Presidential – Compressed Natural Gas Initiative (P-CNGI) had said that no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI boss, Michael Oluwagbemi, emphasised that the recent pump price adjustments announced by certain operators were purely private-sector decisions and not the outcome of any government directive or policy.

For absolute clarity, it said that while pricing matters fell under the purview of the appropriate regulatory agencies, no directive or policy had been issued by the Federal Government to alter CNG pump prices.

The P-CNGI said its mandate, as directed by President Bola Tinubu, was to catalyse the development of the CNG mobility market and ensure the adoption of a cheaper, cleaner, and more sustainable alternative fuel and diesel nationwide.

Oil & Energy

‘Nigeria’s GDP’ll Hit $357bn, If Power Supply Gets To 8,000MW’

Published

1 week ago

September 8, 2025

The Tide

The Managing Director, Financial Derivatives Company Limited (FDC), Bismarck Rewane, has said that Nigeria’s Gross Domestic Product (GDP) could rise to $357b if electricity supply would increase from the present 4.500MW to 8,000MW.

Rewane also noted that Nigeria has spent not less than $30 billion in the power sector in 26 years only to increase the country’s power generation by mere 500MW, from 4,500 MW in 1999 to 5,000MW in 2025 though the sector has installed capacity to generate 13,000 MW.

In his presentation at the Lagos Business School (LBS) Executive Breakfast Session, titled “Nigeria Bailout or Lights Out: The Power Sector in a Free Fall”, Rewane insisted that the way out for the power sector that has N4.3 trillion indebtedness to banks would be either a bailout or lights out for Nigeria with its attendant consequences.

He said, “According to the World Bank, a 1.0 per cent increase in electricity consumption is associated with a 0.5 to 0.6 per cent rise in GDP.

“If power supply rises to 8000MW, from current 4500MW, the bailout shifts money from government into investment, raising consumption and productivity. And, due to multiplier effects, GDP could rise to $357 billion.”

The FDC’s Chief Executive said “in the last 30 years, Nigeria has invested not less than $30 billon to solve an intractable power supply problem.

“The initiatives, which started in 1999 when the power generated from the grid was as low as 4,500MW, have proved to be a failure at best.

“Twenty-six years later, and after five presidential administrations, the country is still generating 5,000MW. Nigeria is ranked as being in the lowest percentile of electricity per capita in the world.

“The way out is a bailout, or it is lights out for Nigeria”, he warned.

He traced the origin of the huge debts of the power sector to its privatisation under President Goodluck Jonathan’s administration, when many of the investors thought they had hit a jackpot, only to find out to their consternation that they had bought a poisoned chalice.

Rewane, who defined a bailout as “injection of money into a business or institution that would otherwise face an imminent collapse”, noted that the bailout may be injected as loans, subsidies, guarantees or equity for the purpose of stabilising markets, protect jobs and restore confidence.

He said, “The President has promised to consider a financial bailout for the Gencos and Discos. With a total indebtedness of N4.3 trillion to the banking system, the debt has shackled growth in the sector.”

Rewane warned that without implementing the bailouts for the power sector, the GENCOs and DISCOs would shut down at the risk of nationwide blackout.

Rewane, however, noted that implementing a bailout for the power sector could have a positive effect on the country’s economy if Nigeria’s actual power generation could rise from today’s 4,500 MW to around 8,000 and 10,000 MW.

The immediate gains, according to him, would include improved power generation and distribution capacity, more reliable electricity supply to homes and businesses as well as cost reflective tariffs.

Oil & Energy

NEITI Blames Oil, Gas Sector Theft On Mass Layoff

Published

1 week ago

September 8, 2025

The Tide

The Nigeria Extractive Industries Transparency Initiative (NEITI) has blamed the increasing crude oil theft across the nation on the persistent layoff of skilled workers in the oil and gas sector.

The Executive Secretary, NEITI, Orji Ogbonnaya Orji, stated this during an interview with newsmen in Abuja.

Orji said from investigations, many of the retrenched workers, who possess rare technical skills in pipeline management and welding, often turn to illicit networks that steal crude from pipelines and offshore facilities.

In his words, “You can’t steal oil without skill. The pipelines are sometimes deep underwater. Nigerians trained in welding and pipeline management get laid off, and when they are jobless, they become available to those who want to steal crude”.

He explained that oil theft requires extraordinary expertise and is not the work of “ordinary people in the creeks”, stressing that most of those involved were once trained by the same industry they now undermine.

According to him, many retrenched workers have formed consortia and offer their services to oil thieves, further complicating efforts to secure production facilities.

“This is why we told the Nigerian Content Development and Monitoring Board (NCDMB) to take this seriously. The laying off of skilled labour in oil and gas must stop”, he added.

While noting that oil theft has reduced in recent times due to tighter security coordination, Orji warned, however, that the failure to address its root causes, including unemployment among technically trained oil workers would continue to expose the country to losses.

According to him, between 2021 and 2023, Nigeria lost 687.65 million barrels of crude to theft, according to NEITI’s latest report. Orji said though theft dropped by 73 per cent in 2023, with 7.6 million barrels stolen compared to 36.6 million barrels in 2022, the figure still translates to billions of dollars in lost revenues.

Orji emphasised that beyond revenue, crude oil theft also undermines national security, as proceeds are used to finance terrorism and money laundering.

“It’s more expensive to keep losing crude than to build the kind of monitoring infrastructure Saudi Arabia has. Nigeria has what it takes to do the same”, he stated.