Energy
Another Round Of Fuel Crisis Looms, PMS Goes For N900/Litre
The streets of Lagos and Abuja, Nigeria’s economic and political capital cities, respectively, appear to be drifting into another round of energy crisis, with Premium Motor Spirit (PMS), popularly called petrol, selling for N900/litre.
Biztellers reports that this follows the raising of ex-depot price of petrol from N630 to N720/litre by private depot owners.
The immediate response of petrol stations within the Lagos and Ogun States axis has been to declare scarcity, which has triggered panic among the populace.
It was gathered some dealers were reluctant to purchase products at the new rates from the private depots.
The National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, was cited by The PUNCH as declaring that many filling stations did not open for business because they had no fuel in their tanks.
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According to Fashola, the Nigerian National Petroleum Company Limited, which is the sole importer of petrol at the moment, should explain to Nigerians what was happening with the product.
In his words, “Those that shut their stations do not have fuel to sell. When you don’t have fuel, you cannot open your station. That is the problem. You know the NNPC is the sole importer of this product. I think it is in the best position to tell us what is actually going on.
“Currently, independent marketers cannot buy what the private depots are selling. They are selling fuel between N715 and N720 per litre. How much will marketers sell the product? Look at the cost of bringing it to their depots; with transportation and other depot expenses, it will be too costly for them. That is why the stations are shut down.
“Some marketers refuse to go and buy because they know the masses cannot afford high-priced petrol in this economy. That is the situation for now.”
Biztellers reports that private depot owners, used to sell petrol to independent marketers at the rate of N630-650/litre, while the NNPC Ltd was selling to major marketers at a price below or around N600.
The pending negotiations between the IPMAN and the NNPC Ltd for direct supplies to its members has not borne fruits.
Biztellers gathered that the NNPC Ltd, instead of seeking a lasting solution was focused on a temporary reprieve by pressuring the private depots in Apapa to prioritise supply to Abuja to dispel mounting fuel queues.
Industry watchers are tracing the short supply to the Lagos and its environs, to the efforts to solve the queues mounting in the Abuja area by shifting supply focus there.
Energy watchers are concerned because the signals appeared too soon after the Reuters averred that Nigeria’s debt to PMS suppliers had surpassed $6bn, doubling the figure as at April. It traced the surge to NNPC Ltd’s failure to bridge the gap between fixed pump prices and international fuel costs.
The Reuters report had asserted that the crisis had long brewed with part of January imports, put between $4bn and $5bn still outstanding to suppliers.
The debt pile-up is being managed, according an unnamed industry source, with “the $250,000 a month (per cargo) for late payment compensation,” the PUNCH wrote.
Even at that, at least two suppliers were said to have stopped participating in recent tenders after hitting self-imposed debt exposure limits to Nigeria, meaning they would not supply more PMS until they receive payments.
As a consequence, Reuters noted, Nigeria’s tenders to buy gasoline in June and July were smaller.
The NNPC Ltd was expected to import via tender about 850,000 tonnes in July, according to the Reuters report quoting sources, down from the typical one million tonnes in previous months.
As that is brewing, some private depot owners have been showing reluctance to supply petrol to independent marketers, who own the larger percentage of the filling stations in Nigeria.
The depot owners on their part, claim they could only distribute what they were supplied by the sole importer, the NNPC Ltd.
One of the depot owners, was cite thus, “Currently, we focus on our filling stations. We get less than 50 per cent of what we usually get from the NNPC now.
So, we make sure we feed our stations first before we consider selling to independent marketers. That is why most of them are out of stock. You know they don’t have access to the NNPC and the little we get is not even enough for our stations,” by The PUNCH.
The IPMAN president had fingered the supply chain, “The current situation is a result of the way private depot owners have been selling their products. It has been very difficult for independent petroleum marketers to get the product and sell it in Abuja and neighbouring states, as well as in other states in the North.
“So the queues you are seeing now are because of the cost of PMS by private depots. The private depots are selling at N710/litre, but if you check the price of the same product at NNPC retail outlets, it is N617/litre.
“Therefore, by the time we independent marketers buy from private depots and bring it to our filling stations, we will not be able to sell our product because our cost price is already so high, while the cost at NNPC retail outlets is far lower.
“And you know that when we buy it at the rate of N710/litre we have to add transportation cost again because there is no equalisation. And when we add the cost of transportation, the pump price is going to be higher than the N710/litre ex-depot price, whereas NNPC stations sell at N617/litre.”
He maintained that the number of stations operated by IPMAN, meant that any distortion in the supply of products to its members would eventually lead to fuel queues because major marketers and NNPC stations are fewer.
In the wake of a prolonged power crisis impacting Northern Nigeria, Minister of Power Adebayo Adelabu visited the Zawaciki 1MWp mini-grid project in Kano, underscoring the potential of decentralized renewable energy solutions to alleviate regional power shortages.
The project, operated by Bagaja Renewables, provides daytime electricity to the Gida Dubu community, offering a vital source of power as the region faces widespread blackouts.
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Sadiq Zakari, Managing Director of Bagaja Renewables, welcomed the Minister to the facility and highlighted the critical timing of the visit.
“Bagaja Renewables had the distinct honor of welcoming the Honorable Minister of Power to the Zawaciki 1MWp interconnected mini-grid,” Zakari said.
“This visit comes at a critical time, as Northern Nigeria endures a prolonged blackout, underscoring the urgent need for alternative power solutions.
The Zawaciki mini-grid has been instrumental during this crisis, providing at least 9 hours of daytime electricity to the Gida Dubu community, demonstrating the potential of renewable energy in addressing the region’s energy needs.”
Minister Adelabu praised the Zawaciki project as a model for interconnected mini-grids nationwide, noting its role as a sustainable solution for communities grappling with unreliable power supply.
“The Honorable Minister expressed admiration for the Zawaciki project, recognizing it as a viable proof of concept for interconnected mini-grids across Nigeria,” Zakari stated.
“He emphasized the importance of such initiatives and called on state governors and other key stakeholders to support efforts to decentralize and strengthen the nation’s power infrastructure.
By backing projects like Zawaciki, stakeholders can play an instrumental role in reducing reliance on the national grid and ensuring a more stable power supply for local communities.”
Zakari underscored the transformative potential of private-sector renewable energy projects in Nigeria’s power landscape.
He said, “As we have witnessed here at Zawaciki, private-sector-driven renewable energy solutions can transform Nigeria’s energy landscape. With the right policies and support, we can empower communities and enhance energy resilience, even in times of national power instability.”
In addition to the Zawaciki project, Bagaja Renewables is developing several renewable energy initiatives across Northern Nigeria. Among these are:
Barhim Estate, Katsina: A residential power initiative aimed at expanding energy access for households in the region.
Kura-Karfi Commercial Cluster, Kano: Focused on delivering clean and reliable power to commercial areas, this project aims to support local businesses and stimulate economic growth.
Kafin Hausa, Jigawa: With site fencing completed, Bagaja Renewables is preparing to begin technical design and engineering work for a mini-grid in Kafin Hausa, slated to start construction soon.
Zakari said, “These projects represent Bagaja Renewables’ unwavering commitment to building a resilient, decentralized, and renewable-powered energy future across Northern Nigeria.
“Bagaja Renewables is dedicated to collaborating with the government and stakeholders to scale up renewable energy solutions that will support communities, industries, and essential services.
“We believe that decentralized power generation is the future for Nigeria, and we are eager to contribute to a sustainable, reliable, and inclusive energy system for all.” he added
Power has been restored across Plateau, Bauchi, Gombe, and Benue States, bringing relief to residents who endured a 10-day blackout.
The Jos Electricity Distribution Company confirmed that electricity was reinstated around 7:20 p.m. on Wednesday, prompting celebrations in Jos, the Plateau State capital, and other affected areas.
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The prolonged outage was caused by the tripping of a major 330kV transmission line between Benue and Enugu states, leaving several northern states without power.
The blackout severely impacted daily life and economic activities, with residents expressing frustration over the disruption to businesses, healthcare services, and personal livelihoods.
In response, President Bola Tinubu took swift action, summoning Minister of Power Adebayo Adelabu and National Security Adviser Nuhu Ribadu to address the crisis.
Presidential Adviser Bayo Onanuga disclosed on Monday that President Tinubu directed the Ministry of Power and relevant agencies to expedite restoration efforts.
“President Tinubu is deeply concerned about the reports of vandalism and deliberate destruction of essential power infrastructure,” Onanuga said in a statement.
“The President has tasked TCN engineers with bringing immediate relief to the affected states and implementing a long-term solution to prevent future outages.”
The Federal Government of Nigeria Power Company (FGN Power Company) has announced significant progress in the pilot phase of the Presidential Power Initiative (PPI), which is set to revolutionize the nation’s electricity transmission landscape.
The initiative, in partnership with Siemens, aims to enhance the country’s power infrastructure through the deployment of advanced technology and equipment.
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Kenny Anuwe, the Managing Director and CEO of FGN Power Company, revealed that the installation and commissioning of eight power transformers across key locations are now complete.
The transformers have been successfully deployed in Ajah, Maryland, Apo, Okene, Ihovbor, Amukpe, Potiskum, and Birnin Kebbi, resulting in a notable increase in the transmission wheeling capacity by 569.6 megawatts (MW).
In addition to the transformers, three mobile substations are operational in Ajah, Jebba, and Kawnar Dangora, further boosting the transmission capacity by an additional 151.2 MW.
Anuwe emphasized that these enhancements are pivotal in addressing the energy needs of the country and supporting economic growth.
Looking ahead, Anuwe stated that the transmission network will be augmented by an impressive 720.8 MW, with plans to commission the remaining equipment to deliver at least another 500 MW by the end of 2024.
This strategic initiative is expected to significantly improve power distribution and reliability, marking a transformative step towards a more robust energy sector in Nigeria.
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