The Association of Nigerian Electricity Distributors (ANED) has said the 11 Distribution Companies (DisCos) are losing over N10 for every kilowatt hour of electricity they supply to customers.
At a briefing yesterday in Abuja, ANED spokesman, Bar. Sunday Olurotimi Oduntan, said “No DisCo has less than N10 per kilowatt hour loss in its operation. No single DisCo is making profit as at today because we are only struggling to recover our cost.”
Citing reasons for the liquidity in the power sector which has risen to N809.6 billion recently, Oduntan said the Multi-Year Tariff Order (MYTO) 2015 implemented in February benchmarked the foreign exchange (Forex) rate of a US dollar at N197 to compute the prevailing tariff.
“The major part of the liquidity issue is that foreign exchange keeps fluctuating. As at December 2015, it was N197. By June 2016 it became N293 and now it is N360 at official rate. This is a difference of N163.
“Although the cost that comes to the DisCos is higher, they are still expected to sell at the MYTO price because it has not been reviewed. Cost of energy has gone up but the tariff remains the same. We are not clamouring for a tariff raise but government needs to intervene because the shortfall in the sector has reached N809.8 billion,” Oduntan said.
On solving the liquidity issue, Oduntan said the federal government should work on how it could help by giving assurance of gas supply, and work towards selling gas in local currency - naira.
He said: “The IOCs do not want to sell in naira but government should look at ways of factoring this thing or getting it around.
“We buy gas in dollar and they don’t sell at the forex recognised by MYTO but we are compelled to still sell electricity by that N197 forex in MYTO and that is causing the shortfall.”
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