Oil & Energy

Tinubu Backs N4trn Bond To Resolve Power Sector Liabilities

Published

11 hours ago

July 28, 2025

President Bola Ahmed Tinubu has given anticipatory approval for a N4 trillion bond initiative aimed at addressing the liquidity shortfall in Nigeria’s power sector.

Tinubu gave the approval during the meeting with representatives of the Association of Power Generation Companies (GenCos), led by former Niger State Governor, Col. Sani Bello (rtd), at the Presidential Villa, Abuja, weekend.

Special Adviser to the President on Energy, Ms. Olu Verheijen, who disclosed this to newsmen, said President Tinubu reaffirmed his administration’s commitment to resolving the financial challenges bedeviling the sector.

According to her, Tinubu acknowledged the historical liabilities inherited from previous administrations and assured the GenCos that his government would approach the issue with transparency and fairness.

Tinubu said, “I accept the assets and liabilities of my predecessors, and there is no question about that. But that acceptance must be on credible grounds.

“I need to wear the audit cap of verifiability, authenticity, and the fact that this inheritance is not a mere deodorant but a support structure for critical economic and industrial promotion.”

The President emphasised the need for patience from GENCOs and financial institutions, noting that government agencies are actively engaging audit and legal firms to scrutinise the claims.

“We are here. So, market it to your other colleagues. Give us time to do verification and validation of the numbers”, he said.

While reaffirming his belief in a market-driven electricity sector, the President said the industry’s long-neglected legacy issues are now receiving the attention they deserve.

“This is a longstanding issue that is now being dealt with. I know how much we have been able to save on fuel subsidies. We introduced the alternative, CNG, to bring relief back to the people”, the President stated.

Describing electricity as “the most important discovery of humanity in the last 1,000 years”, the President reaffirmed that access to electricity is fundamental to economic growth and human dignity.

The Special Adviser to the President, Ms. Verheijen, attributed the liquidity crisis to “a combination of unfunded tariff shortfalls and market shortfalls” that has built up over a decade.

She stated that as of April 2025, the Federal Government was carrying a verified exposure of N4 trillion in debts to GENCOs, an accumulation dating back to 2015.

“We have since sat with 27 GENCOs—not all of them are here today—and reviewed their PPAs and gas sales agreements to understand the legitimacy of their claims. The GENCOs claimed about N4 trillion from 2015 to the end of 2023″, she said.

According to her, the Nigerian Bulk Electricity Trading Company (NBET), the agency that contractually mediates between GENCOs and the government, has validated N1.8 trillion of these claims so far.

“Since that period, we have had N200 billion in unfunded subsidies that have accumulated the federal government’s liability.

“So, as of April 2025, the total exposure that we are carrying at the moment is N4 trillion”, she added.

Verheijen, however, cautioned that the figure remains subject to downward revision, pending final validation.

“While there is an anticipatory approval of this N4 trillion bond programme, it is subject to negotiations and final settlement of agreements. Only the amounts that the federal government validly owes are the things that will make it into the issuance by DMO”, she explained.

Oil & Energy

States Can’t Slash Electricity Tariffs – NERC

Published

11 hours ago

July 28, 2025

The Tide

The Nigerian Electricity Regulatory Commission (NERC) has declared that state governments and their regulatory agencies lack the authority to unilaterally reduce electricity tariffs for power supplied from the national grid.

The Commission made its position known in a Public Notice titled “Application of Multiple Tariff Regimes in Nigerian Electricity Supply Industry (NESI)” on Thursday.

The notice came on the heels of the controversy over the Enugu Electricity Regulatory Commission (EERC) reduction of tariff for the Band A customers in its franchise areas from N209 per kWh to N160/kWh.

While operators in the NESI value chain such as the Electricity Distribution Companies (DisCos) and Electricity Generation Companies (GenCos), have condemned the downward review, EERC has based the rate of crash on the sufficiency of the Federal Government.

NERC and the utility providers in NESI have, however, expressed fears that the other states’ electricity commissions might toe the line of Enugu.

NERC stated, “As states do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licenses issued by the Commission, they must holistically incorporate the wholesale costs of grid supply to their states without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way of a subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission, and legacy financing costs in NESI.

“The Commission’s attention has been drawn to the increasing stakeholders’ concerns on the Tariff Order (Order No. EERC/2025/003) issued by the Enugu State Electricity Regulatory Commission to its Licensee Mainpower Electricity Distribution Limited (MEDL) that relies exclusively on electricity supply (generation and transmission) from the national grid.

“NESI stakeholders have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to NGN160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs, along with the financing costs for legacy obligations in NESI.

“It is pertinent to state that the NGN160.4 per kWh was arrived at largely by reducing the current average generation tariff of NGN112.60 per kWh to NGN45.75, with an assumption of a subsidy component, a difference of N66.85 per kWh.

“Section 34(1) of the EA places a statutory obligation on the Commission to create, promote, and preserve efficient electricity industry and market structures and ensure the optimal utilisation of resources for the provision of electricity, and we are also aware that EERC, as a sub-national electricity regulator, also has a similar statutory obligation in their enabling law, and neither NERC nor EERC, as responsible regulatory institutions, would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the Constitution.

“All stakeholders are advised to note that the Commission is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid and grants further assurances of its unwavering statutory commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.”

Oil & Energy

Oil Sector Slowdown’ll Threaten 2025 Budget Execution – NESG

Published

11 hours ago

July 28, 2025

The Tide

The Nigerian Economic Summit Group (NESG) has raised concerns over the persistent underperformance of the oil and gas sector, warning that it poses a significant threat to the effective implementation of the 2025 budget.

In its latest publication titled “NESG 2025Q1 GDP Alert”, the private sector-led think tank observed that Nigeria’s crude oil production in the first quarter of 2025 fell well below the government’s budget benchmark of 2.06 million barrels per day (mbpd).

This shortfall, the NESG warned, translates directly into lost oil revenues, which are critical to funding key government expenditures outlined in the budget.

“Persistent slowdown in the oil and gas sector poses a threat to the execution of the 2025 budget.

“In 2025Q1, the average crude oil production is significantly below the budget benchmark of 2.06mbpd, translating to lost oil revenues needed to implement the budget.

“This suggests the urgent need to resolve challenges facing domestic crude oil production, including ageing infrastructure, oil theft, pipeline vandalism, and kidnapping of expatriate workers”, the report stated.

The group commended the improvements in the refining sector’s performance in recent months.

“Persistent improvement in the Oil refining sector is remarkable”, NESG stated.

It, however, noted that there is a need to revive state-owned refineries to sustain the sector’s growth.

“The emergence of Dangote Refinery has been a game-changer for Nigeria’s oil and gas sector, reversing more than half a decade of contraction in the Oil refining sector and slashing import bills on petrol by about 53 percent (year-on-year) in 2025Q1.

“This suggests the need to support privately owned refineries and incentivise investments into the downstream oil and gas sector”, NESG noted.

Oil & Energy

Nigeria Loses More Crude Oil Than Some OPEC Members – Nwoko

Published

2 months ago

May 26, 2025

The Tide

Nigeria’s losses due to crude oil theft has been said to be more significant than those of some other members of the Organisation of Petroleum Exporting Countries(OPEC).
The Chairman, Senate Ad- hoc Committee on Crude Oil Theft, Senator Ned Nwoko, made this known in an interview with newsmen in Abuja.
Nwoko noted with dismay the detrimental impact of the issue, which, he said include economic damage, environmental destruction, and its impact on host communities.
According to him, the theft was not only weakening the Naira, but also depriving the nation of vital revenue needed for infrastructure, healthcare, education and social development.
The Senator representing Delta North Senatorial District described the scale of the theft as staggering, with reports indicating losses of over 200,000 barrels per day.
Nwoko disclosed that the ad hoc committee on Crude Oil Theft, which he chairs, recently had a two-day public hearing on the rampant theft of crude oil through illegal bunkering, pipeline vandalism, and the systemic gaps in the regulation and surveillance of the nation’s petroleum resources.
According to him, the public hearing was a pivotal step in addressing one of the most pressing challenges facing the nation.
‘’Nigeria loses billions of dollars annually to crude oil theft. This is severely undermining our economy, weakening the Naira and depriving the nation of vital revenue needed for infrastructure, healthcare, education, and social development.
‘’The scale of this theft is staggering, with reports indicating losses of over 200,000 barrels per day more than some OPEC member nations produce.
‘’This criminal enterprise fuels corruption, funds illegal activities and devastates our environment through spills and pollution.
‘’The public hearing was not just another talk shop; it was a decisive platform to uncover the root causes of crude oil theft, bunkering and pipeline vandalism.
‘’It was a platform to evaluate the effectiveness of existing surveillance, monitoring, and enforcement mechanisms; Identify regulatory and legislative gaps that enable these crimes to thrive.
‘’It was also to engage stakeholders, security agencies, host communities, oil companies, regulators, and experts to proffer actionable solutions; and strengthen legal frameworks to ensure stricter penalties and more efficient prosecution of offenders”, he said.
Nwoko noted that Nigeria’s survival depended