Nigeria’s Minister of Power, ADEBAYO Adelabu, has said the federal government would have preferred that the gas utilized by the electricity generation companies (GenCos) is traded in Naira.
Currently, the GenCos are paid for gas in dollars, putting more pressure on limited foreign exchange in the country.
This, the Minister said, has created a hugely volatile variable that significantly affects the pricing of electricity to end-users in the country.
Speaking at the Ministerial retreat on the integrated national electricity policy and strategic implementation plan in Abuja, Adelabu stressed that the preferable option would help manage the foreign currency related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology.
He noted: “While we appreciate the interplay of contractual obligations, economics and the application of the Petroleum Industry Act, it must also be said that, as a matter of urgent national interest and economic survival, we must find ways and means to pursue domestic gas policies and incentivize stakeholders for the supply of gas for inland use in electricity supply, other industrial activities, and conversion to CNG and LPG for transportation and domestic uses respectively”
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“Therefore, I would suggest that one of the major deliverables from this policy-making process is a viable method for establishing a sustainable capital investment programme around gas processing and transportation infrastructure with its associated fiscal incentives and policies that will attract/unlock investments into the production of Naira-denominated gas from inland gas basins, and in Non-Associated Gas fields from Nigeria’s various prolific hydrocarbon basins”
Meanwhile, Adebayo said to align with the Electricity Act 2023 and the industry’s demands, it’s time to restructure the Transmission Company of Nigeria (TCN) into two entities: the Independent System Operator (ISO) and the Transmission Service Provider (TSP).
“This restructuring must synchronize with the evolving landscape of State Electricity Markets, addressing calls for the decentralization of the national grid into regional grids interconnected by a new higher voltage national or super-grid”, he stated
