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Towards Effective Power Sector Reform

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The power sector is one of those sectors of the Nigerian economy that has received critical attention within the past 57 years of the corporate existence of the country as an independent state.
As part of measures to attain desired impact and maximal results in the power sector, vast treaties and hypothesis have been made over the past years, while billions of tax payers money have been sunked in.
The prospect of development, remains but a flicker, a mere shallow reflection of the expected breakthrough from the huge investment invested into the sector.
However, as the country marks its 57 independence celebration, Nigerians are desirous of the full dividends of the huge investment in the power sector.
The fact been that effective power supply is what is needed in the country to drive entrepreneurial growth and enterprise development among the teeming masses and create job opportunities.
Pundits have blamed the challenges in Nigeria power sector reforms on many factors.
One of such factors identified is the use of similar approach or methodology in solving power sector problems, thereby resulting in same old inefficiencies.
Apart from apparent diversion of fund meant for the resuscitation of the ailing sector, the lack of input of real technocrats and experts in policy making and implementation, has also been pointed as been responsible for the woes in the sector.
Musing over the prospect of development in the Nigerian power sector, an expert, Engr. Isaac Adekanya said the lapses in the sector reform were traceable to some missing links in the operation of the power sector.
Adekanya, who is the Port Harcourt branch Chairman of the Nigeria Institute of Electronic, Electrical engineers, disclosed in an exclusive interview with The Tide, that the Nigerian power sector was yet to attain synergy in the three major areas that constitute the sector, such as Power Generation (Genco) power Distribution (DISCO) and Power Transmission (Transco).
According to him, not all the power generated in the country are transmitted and distributed to the end users.
“There are a lot of technical challenges in the generation, transmission and distribution of power in the country. Most of the power projects carried out in the country have no consideration for the distribution and transmission of the generated electricity to the end users. An example is the Omoku power project, which is a huge investment but had not been able to make maximal impact because of the challenges of transmission and distribution”.
Adekanya, who is also a fellow of the Nigeria Society of Engineers said similar challenges exist in the transmission of generated electricity to the National Electricity Centre at Osogbo. He said most of the power generated are wasted along the line before they get to the end users.
In his view, the concentration of generated electricity at the Osogbo Power Centre where the needs of consumers across the country are decided may not be serving the best interest of the various sections of the country.
He noted that such discretionary measures in the allocation of power may not truly represent the electricity demands of the various states of the nation.
Alternatively, Engr. Adekanya suggested that power generation, transmission and distribution should be based on comparative economic advantage, as the various parts of the nation have peculiar natural advantages in strategic location of energy sources.
“The various parts of Nigeria are disposed with vast energy sources that can be explored based on comparative advantage. In the north, there is abundance of solar energy source, in the middle belt there are rivers that can be harnessed for hydro power generation while the Niger Delta is blessed with enormous gas potentials for thermal energy.
“These energy sources can be explored fully to serve the power need of the various areas where they are located. The idea of evacuating generated power to Osogbo before distribution may not be entirely the best option for the country. Nigerians are in serious need of electricity to do their business. It is regrettable that at 57, the country still runs a generator economy”.
Adekanya, who is a proponent of diversification as the panacea for effective power sector reform, also faulted the allocation of the DISCO by the federal government.
He said the DISCOs were given out on political consideration rather than competence and liberalisation.
He noted that the conspicuous absence, or non involvement of experts with the requisite technical knowhow in the DISCO stifles development in the sub-sector, as those involved are more concerned about profit motive than effective service delivery.
He therefore advocated for full liberalisation of the DISCO for more players to be involved on a note of competition in service delivery as in the case of the telecommunication industry.
In his submission, another expert in renewable energy, Elder Elkanah Hanson said the future of Nigeria’s industrialisation depended on renewable energy which is a global phenomenon.
Elder hanson, who spoke with The Tide correspondent in Port Harcourt recently, said nations of the world are taking advantage of renewable energy to serve their electricity needs.
The elder statesman, pointed out that Nigerian electricity laws were based on colonial orientation and as such do not serve our peculiar development need.
To attain sustainable development in power sector reforms, he called for a total revocation of the obsolete electricity laws and adoption of inventions that are best suited for our polity.
Elder Hanson, who described the concentration of generated electricity at Osogbo as “economic piracy”, said the major problem with Nigeria was its behemoth federal status, that disposses the component units of the country from developing at their own pace.
He called for total restructuring of the centralised federal structure of the country and added that electricity should not be the exclusive reserve of the Federal Government.
“At 57 Nigeria has come of age and should not be toddling again. It is ridiculous that we are still battling with defects in the power sector, our value system must change. The fight against corruption must be thorough and complete. The Federal Government should declare a state of emergency in the power sector. The lumping of power ministry with works and housing is wrong. The power ministry should be made to stand on its own and an expert should be saddled with the responsibility of running the ministry”.
Meanwhile, the Federal Government has stated that it was not against states building their own power projects to support incremental power.
Minister of power, works and Housing, Babatunde Fashola disclosed this at a meeting of the National Council of Power (NACOP) held in Jos, Pleateau State recently.
The minister explained that the law allows states to embark on electricity distribution under license through the Nigeria Electricity Regulatory Commission (NERC).
Fashiola further hinted that in the Power Sector Recovery Programme (PSRC) of the Federal Government, states are vested with enormous responsibilities to ensure that, “their residents comply with safety standards on building by not building on the right of way of 332/133,33 and 11KVA lines”.
He also urged states to encourage their residents to pay for consumed energy while the metering issue and estimated billing is addressed.
Fashola, who described the meter system as cost effective, called on state governments to set up debt verification teams with audit capacity to ascertain the debt profile and develop a payment plan which can be budgeted for. This he noted will help liquidity issues and contribute to the power sector reforms.
Considering the importance of power in the economic development of any nation, the 57th Independence anniversary of Nigeria offers an avenue for a critical review of the power sector for better service delivery.
The fact remains that competence and not politics should be the criteria for participation in the power sector. This will give more room for innovation and efficiency.

Taneh Beemene

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Oil & Energy

Take Concrete Action To Boost Oil Production, FG Tells IOCs

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The Federal Government has called on urged International Oil Companies (IOCs) operating in Nigeria to take concrete steps to ramp up crude oil production, following the country’s ambitious target of reaching 2.5 million barrels per day by 2027.

Speaking at the close of a panel session at the just concluded 2026 Nigerian International Energy Summit, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said the government had created an enabling environment for oil companies to operate effectively.

Lokpobiri stressed that the performance of the petroleum industry is fundamentally tied to the success of upstream operators, noting that the Nigerian economy remains largely dependent on foreign exchange earnings from the sector.

According to him, “I have always maintained that the success of the oil and gas industry is largely dependent on the success of the upstream. From upstream to midstream and downstream, everything is connected. If we do not produce crude oil, there will be nothing to refine and nothing to distribute. Therefore, the success of the petroleum sector begins with the success of the upstream.

“I am also happy with the team I have had the privilege to work with, a community of committed professionals. From the government’s standpoint, it is important to state clearly that there is no discrimination between indigenous producers and other operators.

“You are all companies operating in the same Nigerian space, under the same law. The Petroleum Industry Act (PIA) does not differentiate between local and foreign companies. While you may operate at different scales, you are governed by the same regulations. Our expectation, therefore, is that we will continue to work together, collaborate, and strengthen the upstream sector for the benefit of all Nigerians.”

The minister pledged the federal government’s continued efforts to sustain its support for the industry through reforms, tax incentives and regulatory adjustments aimed at unlocking the sector’s full potential.

“We have provided extensive incentives to unlock the sector’s potential through reforms, tax reliefs and regulatory changes. The question now is: what will you do in return? The government has given a lot.

Now is the time for industry players to reciprocate by investing, producing and delivering results,” he said.

Lokpobiri added that Nigeria’s success in the upstream sector would have positive spillover effects across Africa, while failure would negatively impact the continent’s midstream and downstream segments.

“We have talked enough. This is the time to take concrete actions that will deliver measurable results and transform this industry,” he stated.

It would be noted that Nigeria’s daily average oil production stood at about 1.6 million barrels per day in 2025, a significant shortfall from the budget benchmark of 2.06 million barrels per day.

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Oil & Energy

Host Comm.Development: NUPRC Commits To Enforce PIA 2021 

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The Chief Executive of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), Mrs. Oritsemeyiwa Eyesan, has restated the commission’s commitment to ensuring oil companies comply with the Petroleum Industry Act (PIA) 2021 to promote sustainable development in host communities.
Eyesan made the remark at a Sensitization Programme in Owerri, Imo State, explained that the PIA 2021 mandates oil companies to contribute 3% of their annual operating costs to Host Communities Development Trusts (HCDTs) for community development projects.
Represented by Atama Daniel, Eyeso said “The funds will be used for education, healthcare, infrastructure, and economic empowerment”.
Eyesan assured that the commission would facilitate a smooth implementation process and ensure compliance by oil companies.
She, however, urged oil-producing communities to protect oil facilities in their areas as well as stop all illegal oil exploration activities within their communities.
The chief executive also disclosed that NUPRC has established Alternative Dispute Resolution Centres to resolve disputes between oil companies and host communities.
Earlier, the National President, HOSTCOM, Dr. Benjamin Tamarenebi, advised the host communities to always embark on sustainable development projects rather than frivolous projects.
He warned traditional rulers against bidding for contracts for execution of projects approved for their communities in line with the provisions of the Petroleum Industry Act.”
Tamarenebi noted that monarchs, as heads of Host Communities Board of Trustees, have the responsibility of supervising the awarding and execution of projects approved for the communities and ensuring accountability, adding that awarding contracts to themselves will lead to compromise.
He disclosed that funds disbursed to the communities are now higher than before and urged the communities to take good advantage of it.
“They can build schools and other sustainable projects and think of something that will always be a more economical variable in the community; if this is done there would be economic activities and development. In order not to waste the funds, manpower, train your children with the funds, give them scholarships instead of buying vehicles or renting apartments in the city”, he said.
In his remarks, the Deputy Executive Director, Environmental Defenders Network (EDEN), Johnson Abiye, urged regulators to ensure smooth implementation of the Petroleum Industry Act as it relates to the oil producing communities.
Abiye noted that many communities that were supposed to be part of HOSTCOM were omitted and called for the situation to be redressed.
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Oil & Energy

PETROAN Cautions On Risks Of P’Harcourt Refinery Shutdown 

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The Petroleum Products Retail Outlets Owners Association (PETROAN) has expressed fears of rust, corrosion, abandonment, lack of lubrication, and eventual destruction of installed equipment at the PortHarcourt Refinery due to continued Shutdown.
PETROAN said it would also result in rendering the entire revamp effort futile if urgent action is not taken.
The Public Relations Officer and Spokesperson of the Association, Dr. Joseph Obele, in a statement, noted that over $1.5 billion of public funds were reportedly expended on the rehabilitation of the Port Harcourt Refinery, which was reopened in November 2024 and shut down again in May 2025 due to alleged financial losses.
Speaking on the sidelines of the recent remarks credited to the Group Chief Executive Officer of NNPC Limited, Engr. Bayo Ojulari, in which he described the re-operationalisation of the Port Harcourt Refinery and Petrochemical Company as a ‘waste of resources’ and admitted that NNPC lacks the capacity to operate refineries profitably, Obele expressed disappointment, describing the statement as troubling, demoralising, and deeply disturbing, and raising  fundamental questions about institutional responsibility, governance, and the stewardship of public resources.
With the huge funds already spent on the rehabilitation process, Obele stated
therefore, that for the GCEO of NNPC to  dismiss the entire exercise as a waste of resources, without clear attribution of responsibility, performance audits, or accountability measures, is unacceptable to Nigerians.
“If NNPC truly lacks the capacity to run refineries profitably, as admitted by its own GCEO, then Nigerians deserve to know who advised the investment, who supervised the rehabilitation, who certified the restart, and who benefited from the contracts and operations.
“Public institutions cannot casually dismiss a multi-billion-dollar national asset as a mistake without consequences”, he said.
The PETROAN spokesperson also faulted the narrative by Ojulari that Nigerians should be “thankful” solely because of the success of the Dangote Refinery.
While acknowledging the strategic importance and commendable achievement of the privately owned refinery, he stressed that private investments cannot replace the constitutional and economic obligation of government to efficiently manage public assets.
“Dangote Refinery is a private investment driven by profit and efficiency. NNPC, on the other hand, holds national assets in trust for Nigerians. One cannot be used as an excuse for the failure of the other,” Dr. Obele emphasized.

The energy expert further warned that repeated public admissions of incompetence by NNPC leadership risk eroding investor confidence, weakening Nigeria’s energy security framework, and undermining years of policy efforts aimed at domestic refining, price stability, and job creation.

He described as most worrisome the assertion that there is no urgency to restart the Port Harcourt Refinery because the Dangote Refinery is currently meeting Nigeria’s petroleum needs.

“Such a statement is annoying, unacceptable, and indicative of leadership that is not  solution-centric,” he said.

The PETROAN National PRO reiterated that Nigeria cannot continue to normalise waste, institutional failure, and retrospective justification of poor decisions stressing that admitting failure is only meaningful when followed by accountability, reforms, and a clear, credible plan to prevent recurrence.

By: Lady Godknows Ogbulu
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