Petrol subsidy: Experts speak as policy stirs energy crisis nationwide

The controversy over the removal of fuel subsidy has again brought to the fore the challenges in the power sector.

NEWS FLASH reports that both power, petroleum and gas are intertwined in their functions. None can survive without the other’s support.

Nigerians for instance rely majorly on fuel to support the power generated nationally. This is mainly because generation and distribution remain an issue till date.

An average home connected to electricity has a power backup. Experts believe that approximately 70 percent of Nigerian electricity consumers have generators in their homes to support whatever they get from Discos. These generating sets rely on fuel to work.

Consequently, experts suggest that revamping the power sector and making it work optimally to the satisfaction of Nigerians will reduce the pressure on consumers who still need generators as an alternative source of power.

Fix power, end subsidy crisis

Charging the Bola Tinubu-led government, experts in the energy sector believe a quick fix of the power sector can help to cushion the effect of subsidy removal.

Mr James Ododo an oil marketer based in Uyo, Akwa Ibom State, hailed the removal of fuel subsidy, but insisted that the government must immediately swing into action by fixing the power sector. According to him, Nigerians cannot survive in the absence of power and fuel.

He said: “If we don’t fix power immediately, we will run into problems because most Nigerians, even those into small scale businesses, use generators to power their businesses.

“If we are going to be buying fuel at the rate that it is right now, then we must immediately fix the power sector.

“It will be dangerous to just remove subsidy and still sit back and watch the power sector remain the way it is. How will people do their businesses? The first major area to fix under the new regime of removal of subsidy is the power sector.”

Recall that President Bola Tinubu had assured Nigerians that the power sector will be improved tremendously under his leadership.

Tinubu, during his inaugural speech, said power must triple, assuring collaboration with states for better and proper distribution.

How he will do it remains unknown.

Expert proffers solution to power problem

A System Power Engineer in one of the Discos, Engineer Adesola Oyedotun said the power sector may be on its way to a total reform, expressing optimism that with the incoming government, effort will be put in place to ensure major reforms in the sector.

Speaking to DAILY POST in Abuja, the power expert said his experience in the power sector puts him in the right position to offer the sector his professional advice, stating that though the sector faces problems within the value chain of the business generation, transmission and distribution, they are not insurmountable.

According to Oyedotun, the power sector problem had lingered for long and no particular administration or company could be held responsible, hence the most important task before the Tinubu government was to find a lasting solution.

He said, “The solution to the current challenge in the power sector is not far-fetched if we have the genuine spirit, will and determination to tackle it headlong. This is not rocket science. Actually, the power sector issue has been lingering for so long, but we are hopeful that with the new government in power, resolving those issues confronting the sector is quite possible.

“I’m confident they can address these long term challenges being experienced by the power sector.

“Remember that the power sector was privatised on November 1st, 2013. Before the privatisation, it was then under the Power Holding Company of Nigeria, PHCN. But there was some sort of reform in the sector which divided the Distribution segment of the business into eleven Discos in Nigeria.

“Consequently, we have Abuja Disco, Ikeja, Enugu, Benin, Ibadan, Port Harcourt, Eko and others. That has helped the sector to get closer to the people, but this can be improved or be better.

“Hence, I believe that with the already established foundation, the new government of president Bola Tinubu can achieve a lot.

Coverage areas

Suggesting what can be done to ensure more areas are covered in terms of distribution, the electricity expert said:

“In the area of coverage, I believe this government can do more. For example, you can imagine 4 states being covered by only one Disco. It’s absolutely not going to give the maximum results.

“With millions of customers in demand for supply, it won’t be that effective. So four states in the hand of one Disco can be looked at again.

“For instance, how do you address the issue of transformers as a single Disco looks into the demands in Abuja, Kogi, Nasarawa and Niger? It will be quite difficult meeting those demands in four states.”

Bill allowing states to generate power

He further stated: “But with the new bill signed by former president, Muhammadu Buhari before vacating office, which I consider a step in the right direction, states have jobs to do with regards to power.

“The bill has empowered each state to now begin to generate power and distribute. This will be a massive support towards power improvement.

“I believe each state can key into this and business will be opening and more jobs will be created. We should be out of the challenges in the sector if the states join in the struggle.”

How states, FG, private sector can collaborate

Clarifying the issue regarding the power sector being in the exclusive list and how the state can still come in, Engineer Oyedotun said, it is still possible as it is similar to what even obtains at the moment.

According to him, “Now, if you look at it, you will realise that currently, the government is having 40 percent stake in the sector. What that means is that the investors have 60 percent.

“So it’s still possible to further have a roundtable discussion on how the state can come in and you also let them know their stake.

“By the new law, states may decide to go alone. However, with the majority of the states having problems paying salaries, funding education etc, it is clear that only very few states currently have the financial muscle to go into a capital intensive and long-term investments like power.

“The States on their own or in collaboration with other states can encourage private sector-led investments in their states. Lagos state recently rolled out its own.

“So it is not so difficult for the sector to have 3 interested parties generating power. I think it is a huge solution.

“So as against having 60/40 percent for both the investors and the federal government, the state’s percentage could come in and ease off the current challenges.”

Power sector is long term investment

Talking about the long term investment of the power sector and how it could become very profitable not in the immediate, the power system engineer said: “Investors in this sector must understand that investment into distribution value chain of this business is a long time investment and must not be compared to investment in banking sector or other sectors of Nigeria economy.”

(Daily Post)