Business

Discos Suffer N543bn Revenue Loss In 12 Months

Published

3 years ago

September 5, 2022

The latest report by the Nigerian Electricity Regulatory Commission shows that total billing to electricity consumers by the 11 distribution companies stands at N816bn.

The report also shows that out of this amount, only N370bn has been collected by the Discos, leaving a total outstanding of N543bn.

The data was contained in the NERC’s Annual Report. The latest report shows that the loss was recorded in 2020.

The figures show that 74.33 per cent and 66.50 per cent billing and collection efficiencies were recorded, indicating 8.44 and 1.34 percentage points decline when compared with 2019.

The level of collection efficiency indicates that as much as N3.35 out of every N10 worth of energy sold during the year 2020 remained uncollected from customers as and when due.

Due to the low billing collection recorded by the Discos, the utility firms were also not able to fully pay for the quantum electricity supplied to them by the Nigerian Bulk Electricity Trading Plc.

Further findings reveal that during the year under review, a total invoice of N883bn was issued to the 11 Discos for energy received from NBET and for service charge by the Market Operator.

Out of the N883bn charged the utility firms, a sum of N370bn was settled, leaving a total deficit of N512bn in the market.

This payment represents 42 per cent remittance performance, indicating six percentage points increase from the final settlement rate recorded in 2019 (36 per cent).

The individual performance indicates that Benin and Eko Discos met the expected Minimum Remittance Obligations to MO and NBET, Ibadan met its MRT to NBET while Enugu and Ikeja met their MRTs to MO.

The average remittance performances to MO and NBET increased respectively from 78 per cent and 29 per cent in 2019 to 93 per cent and 31 per cent in 2020.

Discos’ remittance performance levels ranged from 48 per cent (Yola) to 100 per cent (Benin) for MO, and 10 per cent (Yola) to 45 per cent (Ikeja) for NBET.

Tariff shortfall is the difference between cost-reflective tariff and allowed end-user tariffs payable by consumers.

NERC said the shortfall contributed to liquidity challenges being experienced in the Nigerian Electricity Supply Industry.

Despite the general shortfall recorded by the market, the NERC’s report indicates that the individual remittance for 2020 was an improvement from that of 2019.

It noted that the improvement in the Discos’ remittance performance was partly linked to the continuous enforcement of the MRO, and the OpEx loan facility offered by the Central Bank of Nigeria-NESI Stabilisation Strategy Limited to DisCos.

The facility was meant to part-finance the Discos’ payment obligations to NBET and MO as well as their operations in order to support the transition to the Service-Based Tariff regime.

The Executive Secretary, Association of Nigerian Electricity Distributors, Sunday Oduntan, could not be reached for response on how the low remittances and bill collections was affecting their performances.

Electricity consumers have over the years complained about estimated billing, which according to them, result in apathy towards bill payments.

The spokesperson for Ikeja Electric, Felix Ofulue, had recently said electricity consumers under the billing methodology consume more energy than those already metered.

“Whenever consumers say they are paying excessively, the reason is that someone living in one bedroom sometimes pays more than the person in a three-bedroom flat. For instance, someone in a three-bedroom uses a gas cylinder. Someone in one bedroom uses an electric cooker bought from Lawanson.

“Those cookers are probably 10 years old and they consume more energy than the modern ones. But NERC introduced capping and we were asked to remove our billing methodology, and were asked to bill according to certain parameters mostly on availability of electricity. So, some people in certain areas are on capping but their bill is high because of the availability of power supply. Don’t forget that the guy using a prepaid meter is more careful in managing his light than those without prepaid meters.”

According to a metering expert, Sesan Okunola, the solution to the billing collection challenge is for all electricity consumers to be metered.

Business

Fuel Scarcity Looms As PENGASSAN Stops Gas, Crude Supply To Dangote Refinery

Published

21 hours ago

September 27, 2025

Editor

The industrial dispute between the Dangote Petroleum Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria took a dramatic turn on Saturday as the union ordered seven branches to cut off crude oil and gas supplies to the $20bn facility.

In a letter dated September 26 and signed by its General Secretary, Lumumba Okugbawa, the union accused the refinery’s management of sacking its members in retaliation for exercising their constitutional right to join the union.

The union’s move marks an escalation in the standoff, with PENGASSAN accusing the refinery of anti-labour practices and the unlawful sack of its members.

In the directive issued to its branch chairmen, PENGASSAN instructed its branch chairmen in key upstream and midstream oil companies, including TotalEnergies, Chevron, Seplat, Shell Nigeria Gas, Oando, and Nigerian Gas Infrastructure Company, to immediately cut off all crude oil and gas supplies to the refinery.

The directive comes after PENGASSAN alleged that Nigerian workers were sacked by Dangote Refinery after joining the union, claiming that management also withdrew staff buses and denied entry to locals while allowing expatriates access.

The union threatened to picket the refinery if the situation was not addressed.

In a statement on Friday, the refinery clarified that only a small number of workers were affected by what it described as a reorganisation aimed at preventing acts of sabotage within the facility. It said over 3,000 Nigerians remain in employment, rejecting claims of mass layoffs.

Dangote maintained that the restructuring was necessary after what it described as recurring acts of sabotage in different units of the refinery, which posed serious risks to human lives and operations.

As a result, PENGASSAN instructed its branches in TotalEnergies, Seplat, Chevron, Oando, Shell Nigeria Gas, Renaissance, and NGIC to cut gas supply to the refinery immediately.

The union described the move as “illegitimate” and accused the refinery of spreading misinformation instead of addressing the matter through dialogue.

“As you are aware, the Management of Dangote Petroleum Refinery has disengaged our members in reaction to the exercise of their constitutional right to being unionized.

“They have gone further on a mission of misinformation and propaganda to justify this illegitimacy rather than engaging meaningfully with us to right the wrong.

“Consequent to these, you are hereby directed to cut off gas supply to NGIC effective immediately. All crude oil supply valves to the Refinery should be shut. The loading operation for vessel headed there should be halted immediately,” the directive read.

The union further mandated the NGIC Chairman to ensure strict compliance with the order and told all branch chairmen to give regular updates on the action taken.

“NGIC Chairman, ensure that gas supply to the Refinery is cut off effective immediately. All chairmen on this summons are to report promptly the progress of the directive. Kindly accept the assurances of our highest esteem. Thank you,” the statement read.

Reaffirming its solidarity, PENGASSAN ended the directive with its slogan: “Injury to one! Injury to all!”

On Thursday, the company announced it would suspend petrol sales in naira from September 28 following the exhaustion of its crude-for-naira allocations.

Business

Fuel Price Hike Looms As Dangote Refinery Stops Petrol Sales In Naira

Published

1 day ago

September 27, 2025

Editor

The Dangote Petroleum Refinery has announced the suspension of petrol sales in naira, unsettling marketers and raising fresh concerns over fuel pricing and foreign exchange pressure.

In an email sent to customers at 6:42 p.m. on Friday, the refinery said the decision would take effect from Sunday, September 28, 2025, citing the exhaustion of its crude-for-naira allocation as the reason.

The notice, titled “Suspension of DPRP PMS Naira Sales – Effective 28th September 2025” and signed by the Group Commercial Operations of Dangote Petroleum Refinery & Petrochemicals, also asked customers with ongoing naira-based transactions to formally request refunds.

“We write to inform you that Dangote Petroleum Refinery & Petrochemicals has been selling petroleum products in excess of our Naira-Crude allocations and, consequently, we are unable to sustain PMS sales in Naira going forward,” the statement read.

“Kindly note that this suspension of Naira sales for PMS will be effective from Sunday, 28th of September, 2025. We will provide further updates regarding the resumption of supply once the situation has been resolved.

“All customers with PMS transactions in Naira who would like a refund of their current payments should formally request the processing of their refund.”

The move comes amid a raging dispute between the refinery and labour unions over the alleged mass sack of more than 800 Nigerian workers. This controversy has drawn public outrage and calls for government intervention.

This is the second time the refinery has halted local currency transactions. In March 2025, it briefly suspended sales of refined products in naira, blaming inadequate allocations under the crude-for-naira programme.

Business

Naira Appreciates Massively Against US Dollar In The Black Market, Highest In 15 Months

Published

3 days ago

September 25, 2025

Editor

The naira appreciated massively against the United States dollar at the parallel foreign exchange market.

Abubakar Alhasan, a Bureau De Change operator in Wuse Zone, Abuja, told DAILY POST that the Naira strengthened significantly to N1,490 per dollar on Wednesday, up from N1,520 on Tuesday.

“We buy at N1480 and sell at N1490 on Wednesday due to lower FX demand,” Alhasan confirmed to newsmen.

This means that the Naira gained N30 against the dollar on a day-to-day basis.

The last time they were exchanged at this level in the black market was in June 2024.

Meanwhile, at the official market, it dropped marginally by N1.19 to N1,488.56 per dollar on Wednesday, down from N1,487.37, according to data from the Central Bank of Nigeria.

Analysing the trend at both markets, the difference between official and parallel markets has shrunk to 1.44.

Recall that on Tuesday, the Naira appreciated across official and parallel foreign exchange markets upon an interest rate cut by the apex bank by 50 basis points to 27 per cent.