Oil & Energy

FG To Spend N1.149trn On Petrol Subsidy

Published

7 years ago

January 7, 2019

A princely sum of N1. 149, 385 trillion is estimated to go into the payment of subsidy on petrol imported into the country this year.
With the provision of a mere $1 billion, which is about N305 billion in the 2019 budget year, the country may run into a massive budget deficit if nothing is done about the development.
The breakdown shows that at the prevailing $2.54 per gallon of fuel in the United States, which translates to N774.7 at the official exchange rate of N305 to $1, a litre of petrol in the country costs N193.68 on the average.
Going by the last pricing template released in 2018 by the Petroleum Products Pricing Regulatory Agency (PPPRA), additional cost elements of N14.3 per litre is required to cover the retailers’ margin, bridging fund, dealers’ cost and transporters’ pay.
Thus the landing cost of petrol in the country currently is N207.98. This implies that government currently pays N62.98 subsidy per litre of petrol.
The Nigeria National Petroleum Corporation (NNPC) which has since deployed subsidy as part of its operational costs, as the last resort of supply line as enshrined in the NNPC Act 1977, defrays an estimated N3.149b per day under what is tagged “under-recovery.”
The sum of N3.149b per day therefore implies that the country is projected to spend N1.149, 385 trillion in 2019 on petrol subsidy.
The Group Managing Director of NNPC, Dr. Maikanti Baru, last year said that the country’s daily consumption of petrol was 50 million litres.
This daily national consumption figure was also, yesterday, confirmed by the Acting General Manager, Corporate Services of the Petroleum Products Pricing Regulatory Agency (PPPRA), Kimchi Apollo.
With the NNPC playing the role of the sole importer of petrol into the country and adopting the “under recovery” approach, the PPPRA no longer processes payments of subsidy, but its officials are still present at the ports to ascertain how many litres the NNPC is bringing in.
The take-over of the processing of subsidy payment led many to conclude that the NNPC has usurped the function of the PPPRA, but Apollo insisted that the NNPC has not taken over PPPRA’s responsibilities, stressing that both organisations are working together to ensure a smooth distribution of petroleum products.
Apollo, who had, in an earlier statement explained that the Petroleum Support Fund ended in December 2015, added that the scheme has been managed by the PPPRA since May 2016.”Under this scheme,” the statement explained, “the agency regulates petroleum products supply and distribution through the issuance of Quantity Notification (QN) and LAYCAN to NNPC and Oil Marketing Companies (OMCs). It also monitors discharges at various facilities nationwide.”
Principal Consultant to the National Assembly on Oil and Gas Industry Reform, Dr Francis Adigwe, warned that the current subsidy regime is not sustainable, saying government must exit a regulated downstream sector.
His words: “Government needs to liberalise the downstream sector. Nigeria has an oil and gas industry that will not grow as long as government continues to subsidise products. The importation ensures the value-added that will provide employment and rejuvenate the economy is completely lost.”

Oil & Energy

NERC Sets December 31 For CSP Registration, Mandates N100,000 Non-refundable Registration Fee

Published

2 hours ago

November 23, 2025

The Tide

…..Says Only CBN-Licensed Firms Can Collect Electricity Payments

The Nigerian Electricity Regulatory Commission(NERC) has imposed strict caps on the commissions paid to all third-party electricity bill collectors and ordered electricity distribution companies to re-register every collection partner before December 31, 2025, or risk sanctions.

NERC also mandated a non-refundable N100,000 registration fee for all Collection Service Providers (CSP) insisting that only entities with valid Central Bank of Nigeria (CBN) licences can operate. It further stressed that contract not re-registered by December 31, 2025, automatically becomes invalid.

The new regime, contained in NERC’s Guidelines for the Engagement of Third-Party Collection Service Providers in NESI, came into force on November 1, 2025, and directly targets opaque revenue practices that have long plagued Nigeria’s power sector, marking the latest attempt to enforce Nigeria’s long-standing policy of cashless electricity payment.

Signed by the Commission’s Vice Chairman, Musiliu Oseni, the document standardises how Nigerians can pay for electricity, from USSD and banking apps to PoS agents and rural vendors, and sets binding limits on what the agents can charge for their services.

Under the new framework, only entities licensed by the Central Bank of Nigeria, including banks, PSSPs, PTSPs, MMOs, switching companies, card schemes, and super-agents, are eligible to operate as Collection Service Providers. The guideline sets binding maximum commissions for all USSD, PoS, app-based, banking, and rural payment channels.

The document read, “In furtherance of the policy direction of the Federal Government of Nigeria on the settlement of electricity bills by certain classes of end-use customers, the commission issued Order No. NERC/183/2019 (the “Order”) mandates DisCos to migrate industrial and commercial customers to cashless settlement platforms by 31 January 2020 and R3 customers (now MD residential) by 31 March 2020. Pursuant to the Order, the commission authorised the use of available banking channels and collection service providers to enhance transparency in billing and collection.

“The cashless payment system is a shift from conventional transactions to more efficient, practical, and secure methods of payment for customers. These include but are not limited to banking applications, mobile platforms, credit cards, debit cards, QR/Scan to pay, USSD, payment links, and digital wallets.

“To register, each CSP must submit: A valid CBN licence or permit, A signed agreement with the relevant DisCo, CAC incorporation documents, A banker’s reference, three years’ tax clearance, VAT registration, A list of sub-agents, an API integration agreement with NIBSS, and Proof of payment of a non-refundable N100,000 registration fee. No CSP may commence operations without NERC’s approval, and no DisCo may engage any partner that is not fully cleared by the regulator.”

The guidelines also classify collection channels into: USSD – real-time mobile short-code transactions, Banking and Switching – including apps, ATMs, Interswitch, Flutterwave, Paystack, and NIBSS, Mobile Payment Services – transfers, VANs, wallets, web, intranet, IVR, NQR, and payment links, Agency Services – PoS, kiosks, agents, cash vendors, Rural Services – agency presence in underserved and remote communities.

According to the guidelines, collection partners must not charge more than: N20 per USSD transaction below N5,000, and N50 for transactions at or above N5,000; 0.75 per cent to 3.25 pee cent, depending on channel type, for mobile wallets, agency banking, PoS, kiosks, and rural agents; A hard cap of N2,000 – N5,000 per transaction, whichever is lower.

“To end arbitrary commission charges, NERC has now fixed maximum rates for all categories: USSD below N5,000 – N20, Above N5,000 – N50; Banking & Switching: Banks, gateways – 0.75 per cent, capped at N2,000, ATM – 1.10 per cent, capped at N2,000, Wallets – 1.25 per cent, capped at N2,000

“Mobile Services: Web, chat, IVR, NQR – 1.50 per cent, capped at N2,000, Payout, mobile, VAN – 1.50 per cent, capped at N2,000. Agency & Rural PoS – 1.50 per cent, capped at N2,000, Kiosks – 2.00 per cent, capped at N2,000, Agents – 2.0–3.0 per cent, capped at N5,000, Rural agents – 3.25 per cent, capped at N5,000,” it added.

CSPs may only earn commission for collection services. Deducting fees for any other service, such as IT support or marketing, is expressly prohibited. NERC also directed that all collection contracts must be refunded, except for banks and switching firms whose settlements must occur on a T+1 basis.

Maximum Demand customers are exempt from third-party collections; they must pay directly into DisCos’ accounts, with no commission payable to any agent. “These rules will remain in force until amended by the Commission,” NERC declared.

Recall that in 2019, the commission issued Order NERC/183/2019, mandating DisCos to migrate industrial and commercial customers to cashless payment platforms by January 31, 2020, and residential MD customers (formerly R3) by March 31, 2020. The policy was meant to eliminate leakages, improve transparency, and ensure that collections flowed directly into utility accounts.

Despite this, cash transactions, especially in rural and agency banking channels, remained widespread, with thousands of unregistered agents charging arbitrary rates. Industry operators say some vendors charged unregulated rates far above formal limits, a practice that drained revenue and deepened sector illiquidity.

By: Lady Godknows Ogbulu

Oil & Energy

Emerging Economies Are Powering A Renewable Energy Revolution

Published

2 hours ago

November 23, 2025

The Tide

Renewable energies are exploding in emerging economies as the economics of wind and solar make it the obvious choice in most national and regional contexts. What’s more, the rapidly changing economics of renewables are not just saving money for developing countries, they could soon be making money in considerable sums in many emerging economies.

A recent study from Oxford University finds that low- and middle-income countries stand to benefit the most from adopting renewable energies, with potential GDP gains of around 10 percent in the next 2025 years if they implement a speedy enough transition. This renewable-fuelled economic growth is already underway. The report finds that renewable investments in the world’s 100 largest developing countries (not including China) contributed a combined $1.2 trillion to GDP growth between 2017 and 2022. For most of these nations, that equates to about 2-5 percent of GDP.

“Renewable energy drives prosperity,” reads the report’s executive summary. “Done well, it can expand affordable energy access, attract investment, create new jobs and increase productivity for the entire economy.”

This is due to several compounding factors. First, renewables have become ridiculously cheap to install and operate. Solar energy, in particular, has seen an incredible economic evolution, with prices plummeting by a positively stunning 90 percent since 2010. “Right now, silicon panels themselves are the same cost as plywood,” Sam Stranks, Professor of Energy Materials & Optoelectronics at the University of Cambridge, recently told NewScientist. As a result, renewables are now a significantly better return on investment than fossil fuels. Plus, green energy spending tends to stay local, supporting more localized supply chains and more directly augmenting local incomes than fossil fuels, the report finds.

On top of this, renewables are better suited to rural and developing contexts in some key ways. “Decentralized renewables like solar mini-grids or rooftop panels are also better at reaching more rural areas where grid connections can be pricey and faulty,” summarizes Semafor.

For example, Pakistan is in the throes of a solar-power revolution as residents increasingly turn to solar-plus-battery systems as an affordable and reliable alternative to the spotty, pricey, and often unreachable local grid. Pakistan has quickly become “one of the world’s largest new adopters” of solar power. “The scale of solar being deployed in such a short period of time has not been seen, I think, anywhere ever before,” says Jan Rosenow, who leads the Environmental Change Institute’s energy program at the University of Oxford.

And Pakistan is not alone. Emerging economies are adding renewable capacities at awe-inspiring rates. In recent years, countries including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have overtaken the United States in their clean energy transitions, with 63 percent of emerging markets in Africa, Asia, and Latin America now sourcing more of their power generation from solar power than the U.S.

“Some countries are pulling off stunningly fast energy transitions, adding solar so rapidly, it’s become a major source of electricity over the course of years — not decades,” reports CNN.

This shift in the global energy sector comes, in large part, thanks to a flood of cheap renewable energy components from China. While there is some cause for concern that China is becoming increasingly powerful and influential in the energy sectors and overall economies of low- and middle-income countries, cheap Chinese supply chains have also transformed the energy sector in critically valuable ways. Without this access to affordable clean energies, these economies would be unable to develop sustainably without significant financial support. And while Western powers have suggested providing such support themselves, such promises for climate financing have routinely been broken.

Despite continued challenges faced by the clean energy transition and an anti-renewable policy shift in the world’s largest economy, it seems like renewables may simply be too cheap to fail. “We have a plentiful and cheap source of electricity that can be built quickly, almost anywhere in the world,” NewScientist recently posited. “Is it fanciful to imagine that solar could one day power everything?”

By Haley Zaremba for Oilprice.com

Oil & Energy

AEDC Confirms Workforce Shake-up …..Says It’ll Ensure Better Service Delivery

Published

2 weeks ago

November 10, 2025

The Tide

The Abuja Electricity Distribution Company(AEDC) has announced a major restructuring exercise as part of efforts to reposition the utility firm for improved service delivery, operational excellence, and stronger customer focus.

In a statement issued by the AEDC management late last Thursday, the company said the move aligned with its ongoing corporate transformation strategy designed to make AEDC more agile, innovative, and customer-centric.

As part of the restructuring, the company said it had promoted high-performing employees, released retiring staff, and disengaged others whose performance fell below expected standards.

It added that it has also begun implementing a comprehensive employee development and customer management plan to strengthen its service delivery framework.

“In line with its corporate transformation strategy, Abuja Electricity Distribution Company has announced a restructuring exercise aimed at delivering improved services to its customers as well as enhanced operational efficiency and excellence.

“The restructuring is in line with our strategic direction to become a more responsive and efficient organisation, capable of delivering world-class service to our customers.

“As part of the transformation, the Company has promoted high-performing staff, released retiring employees and those performing below par, and has put in motion the implementation of a robust employee development and customer management plan aimed at driving AEDC’s customer-centric focus,” the company said.

AEDC noted that the reforms are part of its broader commitment to provide reliable, safe, and sustainable electricity to customers across its franchise areas, including the Federal Capital Territory and the states of Niger, Kogi, and Nasarawa.

The firm further pledged to continue investing in infrastructure upgrades, digital technologies, and operational innovations to improve service reliability and customer satisfaction.

“With a strong commitment to delighting its customers, AEDC continues to contribute to the growth and development of Nigeria’s energy sector through investments in infrastructure, innovative technologies, and sustainable practices.

“AEDC consistently seeks to improve the quality of life for its customers, promote efficient energy usage, and actively engage with its communities,” the statement added.