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Metering: FG takes delivery of 656,752 prepaid meters
By Udeme Akpan
THE Federal Government has
taken delivery of 656,752
prepaid meters, under the phase
0 of the Central Bank of Nigeriafunded
National Mass Metering
Programme, NMMP.
This represents almost 85
percent of the one million meters
to be provided to Nigerians,
whose bills are still based on
estimation.
However, of the 656,752 prepaid
meters, 305,962 have already been
installed for consumers, according
to the Special Adviser to the
President on Infrastructure, Mr.
Ahmad Zakari.
In an interview with Vanguard,
weekend, he said: "The major
problem faced by the indigenous
producers and Meter Asset
Providers, MAPs is the pace of
ramp-up of available personnel for
installation. Another problem is
the lack of a vital plastic component
as one of the two major global
suppliers (based in Germany) had
shut down during the
Coronavirus pandemic, resulting
in pressure to the value chain.
"However, disbursement has
been made for 656,752 meters,
with the Discos already in receipt
of almost 85% of the funded
meters. Based on the current
trend, all Phase 0 installations
should be completed by the end
of June, 2021."
According to him, the nation
would start its phase one and later
Vanguard, TUESDAY, MAY 11, 2021 — 21
phase two of the NMMP.
Previously, the Chairman,
Nigerian Electricity Regulatory
Commission, NERC, Engr.
Sanusi Garba, had said in an
interview with Vanguard that, "The
Nigerian Electricity Supply
Industry, NESI, had what we call
the Meter Asset Provider, MAP.
That scheme was a regulation we
issued in 2018 and it took effect in
2019, involving third-party
businessmen. We gave them
permits, and they went to the
DisCos and got contracts to
supply, install and maintain
meters for them.
"So, they are the ones that have
a responsibility to install meters for
every DisCo in Nigeria. That
system is still working as we speak.
However, what happened was
that when we gave the permits to
those MAPs, and then they got
the contract with the Disco's, each
of them was given quantities of
meters to supply."
TUESDAY, MAY 11, 2021
Nigeria’s oil output drops by 30% in four years
—Investigation
By Udeme Akpan
IN an apparent reflection of the
measures taken to achieve
stability in the global market by
the Organisation of Petroleum
Exporting Countries, OPEC,
pipeline vandalism and oil theft
in the Niger-Delta, Nigeria’s oil
production has fallen by 30 per
cent in the last four years to 1.423
million barrels per day, mb/d in
2020 from 2.041 million barrels per
day, mb/d in 2017.
The figure excludes 2020
condensate production, according
to the data obtained by Vanguard
Energy from OPEC’s monthly
market reports between 2017 and
2020.
Year-on-year, YoY, the nation’s
output declined by 19.3 per cent
to 1.648 mb/d in 2018 from 2.041
mb/d in 2017.
The production level, however,
rose by 6.6 per cent to 1.765 mb/d
in 2019 from 2018 figure before
declining again by 19 per cent to
1.423 mb/d in 2020.
Impact
This steady or consistent drop
in output constitutes a serious
threat to the nation’s economy,
especially as the world continues
to adopt new forms of clean
energy.
However, an investigation by
Energy Vanguard showed that
the impact could have been more
severe on the nation’s economy, if
not for its huge condensate
production and export, estimated
at between 300,000-400,000
barrels per day, bpd.
For instance, although Nigeria
produced 2.041.6 mb/d for the
implementation of its N7.44
trillion budget in 2017, it was
possible to realise its 2.2 mb/d
target at $44.5 per barrel and
exchange rate of N305 per dollar
because of the condensate
production.
According to PKMG Limited,
“Oil price was projected at $44.5/
barrel but closed at $66.73/barrel
by the end of December 2017, due
to the increase in oil price, a
proportional increase in revenue
was expected. However, the
estimated oil revenue was
curtailed by an average actual oil
production of 1.515 mb/d, instead
of the anticipated 2.2 mb/d.
Moreover, the increase in
production occurred at the tail end
of the year, thereby ensuring an
average shortfall in expected
revenue.
Similarly, the 2018 budget was
based on the production of 2.3 mb/
d at $45 per barrel and N305
exchange rate, but the relatively
high price, which stood at between
$50 and $60 per barrel and
condensate enabled Nigeria, to a
great extent, close the gap despite
its limited output, which stood at
1.648 mb/d.
However, the impact of the
condensate was also felt in the
process of implementing the 2019
and 2020 budgets.
GDP
According to the African
Development Bank, AfDB, the
limited output and relatively low
crude prices have impacted
negatively on the nation’s Gross
Domestic Product, GDP, the final
value of the goods and services
produced within a country during
a specified period of time,
normally a year.
In its latest Nigeria Economic
Outlook, obtained by Energy
Vanguard, AfDB stated:
“Nigeria’s economy entered a
recession in 2020, reversing three
years of recovery, due to fall in
crude oil prices on account of
falling global demand and
containment measures to fight the
spread of Covid-19. The
containment measures mainly
affected aviation, tourism,
hospitality, restaurants,
manufacturing and trade.
Contraction in these sectors offset
the demand-driven expansion in
financial, information and
communications technology
sectors. Overall real GDP is
estimated by AfDB to have shrunk
by 3 per cent in 2020, although
mitigating measures in the
Economic Sustainability
Programme, ESP, prevented the
decline from being much worse.
Inflation rose to 12.8 per cent in
2020 from 11.4 per cent in 2019,
fuelled by higher food prices, due
to constraints on domestic
supplies and the pass-through
effects of an exchange rate
premium that widened to about
24 per cent. The removal of fuel
subsidies and an increase in
electricity tariffs added further to
inflationary pressures.
“The Central Bank of Nigeria
cut the policy rate by 100 basis
points to 11.5 per cent to shore up
a flagging economy. The fiscal
deficit, financed mostly by
domestic and foreign borrowings,
widened to 5.2 per cent in 2020
from 4.3 per cent in 2019,
reflecting pandemic-related
spending pressures and revenue
shortfalls.
Outlook, risk
Commenting on outlook and
risks, it stated: “The economy is
projected to grow by 1.5 per cent
in 2021 and 2.9 per cent in 2022,
based on an expected recovery in
crude oil prices and production.
Stimulus measures outlined in the
ESP and the Finance Act of 2020
could boost non-oil revenues.
Improved revenues can narrow
the fiscal deficit to 4.6 per cent and
the current account deficit to 2.3
per cent of GDP in 2021, as global
economic conditions improve.
Reopening borders will increase
access to inputs, easing pressure
on domestic prices and inflation,
projected at 11.4 per cent in 2021.
Downside risks include reduced
fiscal space should oil prices
remain depressed. In addition,
flooding and rising insecurity
could hamper agricultural
production.
Investment
Apparently, responding to these
and other fears, the government
has indicated interest to expand
investment through the
instrumentality of the National Oil
and Gas Excellence Centre,
NOGEC, and utilise petroleum
revenues, as a major instrument
in diversifying the nation’s oildependent
economy.
Speaking at the recent
commissioning of the centre in
Lagos, President Muhammadu
Buhari said: “The establishment
of the National Oil and Gas
Excellence Centre aligns with my
administration’s commitment to
foster stability, growth and
sustainability of the Nigeria Oil
and Gas Industry, consistent with
the economic development and
sustainability agenda articulated
in the National Petroleum Policy
2017, National Gas Policy, 2017,
Economic Recovery and Growth
Plan, ERGP, and the Economic
Sustainability Plan, ESP, 2020.
“At the beginning of my
administration, we set a clear
roadmap for the oil and gas sector
in order to deepen value from the
nation’s huge resource potentials
and create opportunities for
investors, both local and foreign,
when I declared that: ‘Nigeria is
open for business. I am delighted
that, since then, we have
witnessed major final investment
decisions in the sector such as the
AKK Pipeline project, the NLNG
Train-7 project, and the
completion of the 5,000bpd
Waltersmith Modular refinery.
Our renewed drive for economic
diversification, using the oil and
gas industry as a pivot, remains
on track as we expand
government revenues and deploy
them to grow our GDP, generate
employment and eliminate
poverty – all for the overall benefit
of Nigerians.”
Diversification
Nevertheless, in an interview
with Energy Vanguard, weekend,
some experts, including Dr. Bala
Zaka, a Port Harcourt-based
Energy analyst, called for
immediate passage of the nation’s
Petroleum Industry Bill, PIB,
required to bring about a
restructuring of the industry, attract
new investments, as well as
diversify the nation’s oil-driven
economy.
Specifically, he said: “The world
is gradually moving away from oil.
Also, Nigeria’s major oil buyers,
especially China and India, are
still battling with the corona virus
pandemic, meaning that it might
take a while to return to the era of
very high production, demand
and price.”