Art and Culture

Manufacturers, Others Groan over Inadequate Power Supply as Gas Shortage Hits Businesses in Lagos, Ogun

todayAugust 14, 2022 1

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*At N118 – N170 per standard cubic metre, gas cheaper than N780 per litre of diesel 

*Nigeria has 201,000MW electricity deficit, says report

Ejiofor Alike in Lagos and Emmanuel Addeh in Abuja

The operations of manufacturing firms and other businesses in Lagos and Ogun states are currently being threatened following their inability to generate electricity to power their day-to-day activities due to the inadequate supply of gas from marketers, THISDAY’s investigation has revealed.
Nigeria currently has an electricity deficit of 201,000 megawatts as power generation hovers between 3,500MW and just over 5,000MW.

A new report revealed that the country needs 206,000MW of power to be at par with Qatar and others in electricity supply.
With the chronic supply of electricity by distribution and generation companies, manufacturers and other big businesses and organisations rely on gas to generate power for their operations.
At a price of between N118 and N170 per standard cubic metre, which is equivalent to a litre of diesel currently being sold for N780, gas is cheaper for power generation than diesel.

THISDAY gathered that while businesses located close to the major gas pipelines buy gas at N118 per standard cubic metre, others that are not on the pipelines buy at the price of N170 per standard cubic metre.

Investigation reveals that gas supply to businesses and organisations through the Escravos Lagos Pipeline (ELPs) has dropped drastically in recent months.
With this development, the operations of these businesses are being threatened with massive job losses looming.

It was also learnt that some of the marketers who made massive investments in gas pipelines and other infrastructure are counting their losses due to the insufficient gas supply to feed the pipelines.
The 36-inch ELPs, which begin at Chevron’s Escravos gas plant in Delta State, also feed the West African Gas Pipeline (WAGP), which takes Nigerian gas to Benin, Togo and Ghana.

The pipeline operated by the Nigerian Gas Company (NGC), a subsidiary of the NNPC Limited, passes through Sapele, Benin City, Akure, Ife, Ibadan and Lagos.
The Nigerian Gas Marketing Company (NGMC), a subsidiary of NGC, sells gas to marketers that supply the product to businesses in Lagos and Ogun states.
Some of the marketers, it was learnt, include Shell Nigerian Gas, a subsidiary of Shell; Axxela Limited; Green Fuels Limited and Powergas Limited, among others.
THISDAY gathered that manufacturing firms, big companies and other large organisations in Lagos and Ogun states, including the Redeemed Christian Church of God (RCCG) rely on these suppliers for gas to power their operations.

However, these businesses and organisations along this axis have been experiencing an acute shortage of gas from marketers in recent months.
Some marketers have blamed the gas shortage on the supply drop from the NGC.
For instance, an investigation has revealed that these businesses received full supply for only two days in the last 15 days.
With this development, some of the manufacturers and producers of food in the two states have threatened to reduce their staff strengths or suspend operations until the gas supply improves.
This threat, if implemented, will have dire consequences on the economy.
The federal government had declared 2021 -2030 as the ‘Decade of Gas’ to encourage more investments in gas infrastructure and greater dependence on gas usage.

Nigeria Has 201,000MW Electricity Deficit, Says Report

Meanwhile, with a total power generation hovering between 3,500MW and just over 5,000MW, Nigeria has an electricity supply deficit of 201,000MW, a new report has indicated.
The Nigerian Guild of Editors Roundtable on Data-based Subnational Reporting, in its August edition, noted that with the 1,000MW per one million people, recommended as the Sustainable Development Standard, Nigeria’s population of 206 million would require 206,000MW of electricity.

The unreliable power in the country has become a significant problem for citizens and businesses, resulting in annual economic losses estimated at $26.2 billion (N10.1 trillion), equivalent to about five per cent of the nation’s Gross Domestic Product (GDP).
Nigeria’s fragile national electricity grid has collapsed at least seven times this year, with deteriorating infrastructure, limited investment, misalignment and liquidity issues being the main culprits.

Drawing a parallel between Nigeria and selected countries, the editor of the report, Rotimi Sankore, noted in the report that while Nigeria’s highest record ever, has been 5,616MW, Qatar a population of 2.9 million people has 10,000MW.
In addition, he stated that Singapore, with a population of 5.8 million persons currently produces 12,582MW, which is a far cry from what Nigeria generates and supplies.

But the federal government had promised that with the Siemens deal, 7,000MW additional power would be supplied in the first instance, before it rises to 11,000W and consequently 25,000MW by 2025.
Analysing other development indices, Sankore said that with 33 per cent unemployment, 22 per cent unemployment, 42 per cent youth unemployment and 100 million Nigerians drowned in multidimensional poverty, the data wasn’t looking good for the country.

Sankore added that roughly six million children do not complete primary and secondary school, while out-of-school children have now hit 13 million.
According to him, Nigeria’s under-development cannot be solved by cosmetic policies.
“No military solution to under-development and no army has ever defeated under-development. Subnational governance is key to stability while subnational reporting will improve accountability,” he said.

Citing the case of Katsina, he disclosed that the state has the highest malnutrition rate with 58 per cent, forced marriage at 70.9 per cent, highest birth per woman at 7.3 per cent while the lowest age for sexual initiation for girls remained at 15.3 years.

According to him, the state also has the highest polygamy per man, with a rate of 50 per cent worsened by 7.32 per man and 996,000 out-of-school children.
He argued that under-development is the main threat to Nigeria.
According to him, while Nigeria and France had the same population of 45 million each in 1960, France’s population grew by a mere 20 million by 2000, while Nigeria’s population rose by 161 million during the period.

“Investment in education and electricity and health haven’t kept up with population growth,” he said.
By 2050, he projected that Nigeria’s population will be 401 million, up from the current approximately 216 million this year.

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