NLC Threatens Industrial Action Over Proposed Electricity Tariff Hike – The Tide

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The Nigeria Labour Congress (NLC),  says it would call out workers on industrial action if the Federal Government implements a proposed hike in electricity tariff.
It reminded the Minister of Labour and Employment, Chris Ngige, about the   agreement reached between the Federal Government and Organised Labour Committee on Electricity Tariff on September 28, 2020.
The meeting had agreed to freeze further increases in electricity tariff until the committee concluded its work and its report adopted by all the principals in the committee.
The NLC President, Ayuba Wabba, handed down the notice in a reaction to speculations that the 11 power distribution companies had received approval to slightly increase electricity tariffs with effect from September 1.
The hint came from an August 25 notification to customers from the Eko Electricity Distribution Company titled ‘Re: Tariff increase notification’, purportedly signed by the General Manager, Loss Reduction, Olumide Anthony-Jerome.
The notice claimed that the approval was from the Nigerian Electricity Regulatory Commission.
It read, “This is to officially notify you that there will be an increase in electricity tariff with effect from September 1, 2021”.
However, Eko DisCo denied the said notice, saying customers would be informed of any change on its website.
But reacting to the report in a statement on Wednesday titled ‘Notice on speculations on increase in electricity tarrifs’, Wabba cautioned that the organised labour would not tolerate any tariff hike.
He stated: “We wish to draw your attention to the wave of speculation, especially as widely reported in the media that there are fresh plans to grant approval to electricity distribution companies to hike electricity tariff.
“We write to remind the Honourable Minister that the organised labour on September 28, 2020 through the Federal Government-Organised Labour Committee on Electricity Tariff agreed to freeze further increases in electricity tariff until the committee concludes its work and its report adopted by all the principals in the committee.
“It is in light of this that we dismiss the ongoing speculation on increase in electricity tariff as mere speculations.
 “We, however, find it prudent to put you on notice that should government make true the swirling speculation by approving an increase in electricity tariff, Organised Labour would be left with no option than to deploy the industrial mechanisms granted in our laws for the defence of workers’ rights”.
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Domestic gas supply to gas fired generating plants (GenCos) across the country rose significantly by 0.51million standard cubic feet per day (mmscfd) to 2,505mmscfd in the first quarter (Q1) of 2021.
This is 20.2 per cent increase when compared to 2,000mmscfd recorded in the corresponding period of 2020, data contained in the Nigerian National Petroleum Corporation (NNPC), Financial and Operations Report for the month of April, 2021 has shown.
According to the report, a total of 795mmscfd was delivered to gas fired power plants to generate an average power of about 3,416MW of electricity in April, 2021.
It was gathered that this is a decline of 6.0 per cent when compared 844mmscfd supplied in March, 2021 to generate 3,530MW.
The generation sub-sector includes 23 grid-connected generating plants in operation with a total installed capacity of 10,396MW (available capacity of 6,056MW) with thermal-based generation having an installed capacity of 8,457.6MW (available capacity of 4,996MW), and hydropower having 1,938.4MW of total installed capacity with an available capacity of 1,060MW.
However, the report also indicated that a total of 2,355mmscfd of gas was sent to the generating plants in the fourth quarter of 2020, an increase of six per cent when compared to Q1’2021.
A breakdown of gas distribution figures showed that a total of 209.27Billion Cubic Feet (BCF) of natural gas was produced in the month April, 2021, translating to an average daily production of 6,975.72mmscfd.
For the period April, 2020 to April, 2021, a total of 2,902.52 BCF of gas was produced representing an average daily production of 7,369.76mmscfd during the period.
Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and NPDC contributed about 62.07 per cent, 19.95 per cent and 17.98 per cent, respectively, to the total national gas production.
According to the NNPC report, out of the 206.40BCF of gas supplied in April, 2021, a total of 126.83BCF of gas was commercialized; consisting of 42.92BCF and 83.91BCF for the domestic and export market, respectively.
This translates to a total supply of 1,430.90mmscfd of gas to the domestic market and 2,976.94mmscfd of gas supplied to the export market for the month.
This implies that 61.45 per cent of the average daily gas produced was commercialized while the balance of 38.55 per cent was re-injected, used as upstream fuel gas or flared.
Gas flare rate was 9.74 per cent for the month under review.
Total gas supply for the period April, 2020 to April, 2021 stood at 3,081.77 BCF out of which 548.34 BCF and 1,398.78 BCF were commercialized for the domestic and export market respectively.
Gas re–injected, fuel gas and gas flared stood at 1,134.64 BCF.
“Out of the 1,430.90mmscfd of gas supplied to the domestic market in April, 2021, about 794.79mmscfd of gas representing 54.54 per cent was supplied to gas-fired power plants while the balance of 636.11mmscfd or 44.46 per cent was supplied to other industries”.
Similarly, for the period of April, 2020 to April, 2021 an average of 1,313.32mmscfd of gas was supplied to the domestic market comprising an average of 778.76mmscfd or (59.30%) as gas supply to the power plants and 534.55mmscfd or (40.70%) as gas supply to industries.
The Federal Government has stated that plans are underway to reduce the price of gas for power generation companies in the country.
This, according to the Minister for Industry, Trade and Investments, Otunba Adeniyi Adebayo, was geared towards boosting the manufacturing sector competitiveness which has been hampered by power electricity supply.
Speaking at a roundtable discussion on the industrialisation of Africa organised by the Manufacturers’ Association of Nigeria (MAN), Adebayo, noted that Africa contributes less than two per cent to international trade, pushing it to the bottom of the global value chain.
He said this led to lower export trade volumes, lost job opportunities and reduced foreign exchange for players in the continent’s real sector.
According to him, all stakeholders need to work together towards developing measures to improve the cost competitiveness of the manufacturing sector in order for Nigerian industries to lead the transformation of the country and Africa’s economy.
Adebayo said, “For example, we are collaborating with the Ministry of Petroleum Resources to lower the cost of gas which is critical to the production of the energy sector. This is one factor that can improve the cost competitiveness of the sector.
“Another way that Nigerian industries can position themselves for the African economic transformation is by aligning themselves with the country’s industrialisation programme.”
Despite the rise in domestic gas supply, Nigerians have continued to lament over the epileptic power supply across the country.
The former President, Manufacturers Association of Nigeria (MAN), Mr Frank Jacobs, stated, “It is possible to gauge the loss suffered by manufacturers arising from paucity of electricity supply and high cost of alternative energy source. Capacity utilization in the sector has barely been above 50 per cent.
“This implies that the production has been sub-optimal; production value in the sector was estimated at N8.38trillion in 2016. Another way of measuring the loss to manufacturers as a result of the challenges of electricity supply is by looking at the huge cost of alternative energy which was estimated at N129.95billion as at 2016.
“Even though the sector, especially the distribution aspect has been privatised, it is important that government should find ways and means of supporting the DisCos until a stable, quality and reasonably priced electricity is available to the manufacturing sector.
“There is need for government to continue to offer integrated support to all stakeholders on the NESI value-chain i.e. manufacturers, GenCos, TCN, and DisCos in terms of finance and expertise.”
A trader in Olodi-Apapa, Kazeem Onoja, said power supply was good when he moved to the area about eight years ago.
According to him, “Then, public power supply from PHCN was quite okay, we were having between 14 and 20 hours of power supply on most days. We knew their schedule – the days we are meant to have supply and the days we would not have except a major fault occurred.
“Power supply has steadily deteriorated as the area developed and more people come into the neighbourhood”.
On her part, Executive Secretary, the Association of Power Generation Companies (APGC), Joy Ogayi, said, “To bridge the gap between demand and supply of power, there is need for all parts of the power chain to be fully effective to bring about the installed capacity of 13,200MW to hungry consumers.
“However, this is not the case in the power sector in Nigeria.”
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The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said that the earliest the corporation can issue its Initial Public Offer to investors is in the next three years.
The NNPC boss disclosed this on Monday during an interview on Bloomberg TV Global Financial News.
The announcement is one of the outcomes of the Petroleum Industry Act recently signed on the state-owned corporation in the global market.
Speaking on the impact of the PIA on the NNPC, Kyari said the corporation would now be operated in line with the Companies and Allied Act.
However, he stated that the NNPC may not be able to offer its shares to the public by 2022 or 2023 due to certain bottlenecks that had lingered over the years.
Kyari said, “We will be in the position to consider any IPO in three years’ time; that is the provision of the law.
“But when you want to get ready for IPO, you need to do things different. You need to get your books correct; you need to recapitalise; you need to shape your portfolio and many more things that you have to do until you get IPO ready.
“Surely, it is not what we will do in 2022 or 2023; probably the earliest consideration will be in three years’ time”.
It was reported last week that the corporation declared a profit of N287bn in 2020, the first time the oil giant declared in 44 years.
Kyari had stated the profit fell far below the NNPC’s potential.
On the development, the GMD said, “Obviously this company is changing very fast and on the fast lane. We just declared profit for the fiscal year 2020.
“We are not getting ready for the IPO tomorrow; that is not exactly, that is not the situation. IPO really means this company is going to be profitable, it has a long trajectory, it has a short-term view of how things can be done better to align with the best practice in the industry.
“We are trying to see how we can relax the existing framework for energy transition that is ongoing all over the world.
“Every country is adjusting its portfolio by doing things differently in a better way and obviously in the long run, this is going to be a very great company and great companies always go for IPO.
“So, this is not something that we are going to do tomorrow. Obviously not. Our new law has made the provision that we can sell shares of this company, but in today’s context, I really say this company is doing great and getting an IPO means that it is going to be better than what it is today”.
Speaking on why the NNPC is taking stake in the 650,000 barrels per day of crude oil Dangote Refinery owned by Africa’s richest business man, he said the major consideration was energy security.
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Hundreds of bank customers were left stranded yesterday as the officials of the Imo State Government shut all the banks on Bank Road in Owerri, the state capital.
Some of the banks that were sealed by the state government were Access, Polaris, First Bank, Eco Bank, and United Bank for Africa. 
The banks were sealed with customised ribbons by the state government officials as early as 7 am, with hundreds of banks customers seen waiting at various banks as at 9am unattended to. 
Some of the staff of the banks who pleaded anonymity said that the banks were sealed by operatives of Owerri Capital Development Authority sealed 
The Tide reliably learnt that the banks sealed were those that failed to open on Monday, in compliance with the sit-at-home order by the proscribed Indigenous People of Biafra (IPOB) in the South East, in protest of the detention and trial of the IPOB leader, Nnamdi Kanu, by the Federal Government. 
However, some government officials said that the banks were sealed because of building approval plans. 
The Imo State Government is yet to clear the air on this development as of the time of filing this report, while efforts to reach out to the state Commissioner for Information and Strategy,Declan Emelumba, were not successful.
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