This Day (Lagos)

Nigeria's Energy Crisis

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Nigeria today is possibly facing the worst energy crisis ever to befall this nation. But before delving into how we got here in the first place, a brief rundown of the current situation in the energy sector is necessary:

-The country by the government's admission imports every drop of refined fuel needed for domestic consumption;

- None of its four refineries works mainly due to the vandalisation of the crude oil pipelines by militants in the Niger Delta;

- Despite the award of licenses to several private firms to build refineries, absolutely no investor has committed a farthing to their construction;

- The subsidy element in the downstream segment of the oil industry makes it attractive for speculators and the existence of a black market to thrive, and by extension the destruction of fuel pipelines by villagers who expose themselves to certain death;

- Work at several of the power stations under construction in the Niger Delta has fallen behind schedule as a result of activities by the militants in the area;

- Gas distribution to the thermal power stations remains epileptic either due to unscheduled maintenance work by the oil majors, disagreements between PHCN and the Nigerian Gas Company (NGC) over the price of gas, or once again the militia has managed to destroy the pipelines;

- Policy inconsistencies and regulatory overload brought on by competing regulatory agencies (there is DPR, PPPRA, NERC and a new Gas Regulator will soon be thrown into the mix) have made it impossible to implement an integrated energy framework that caters to needs of operators in the energy sector. Need I go on?

Readers by now must be wondering what the oil and gas industry has to do with electricity supply. The answer is everything. Nigeria gets its electricity supply from two major sources comprising hydro and thermal energy sources. But the fact is thermal plants out number hydro generating units by at least three to one in this country. And the ratio is expected to widen with the construction of 11 new power stations of which only one at the Mambila Plateau will be powered by water.

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