Experts weigh in as the withdrawal of gasoline subsidies fuels the energy crisis

The debate over eliminating fuel subsidies has once again highlighted the difficulties facing the power sector.

According to xanderetch, the uses of gas, oil, and electricity are all interconnected. Without the assistance of the other, none can survive.

For instance, Nigerians heavily rely on petroleum to support the nation’s electricity production. This is primarily due to the fact that generating and distribution still present problems.

A power backup is present in the typical electrically powered home. According to experts, almost 70% of Nigerians who use energy at home have generators to supplement whatever they receive from discos. To function, these generating sets require fuel.

Therefore, according to experts, improving the power sector and having it function ideally to Nigerians’ satisfaction will lessen the pressure on consumers who still require generators as a backup power source.

End the subsidy crisis and fix the electrical system.

Experts in the energy sector are criticizing the Bola Tinubu-led government for their belief that a quick repair for the electricity sector can help to mitigate the impact of subsidy removal.

Oil marketer Mr. James Ododo, who is headquartered in Uyo, Akwa Ibom State, applauded the elimination of gasoline subsidies but emphasized that the government must move right away to address the electricity sector. He asserts that Nigerians require fuel and electricity to survive.

“If we don’t fix the power right away, we’re going to have problems because the majority of Nigerians, even those who run small businesses, rely on generators to run their operations,” he said.

“We must quickly address the electricity sector if we are to continue purchasing fuel at the current cost.

“It will be risky to just stop giving subsidies and then observe as the power sector continues to operate as it currently does. How are individuals going to conduct business? The power sector is the first significant area that needs to be fixed under the new system of subsidy reduction.

Recall that President Bola Tinubu promised Nigerians that, under his leadership, the power industry will experience a remarkable improvement.

In his inaugural address, Tinubu declared that power must triple and pledged to work with the states to ensure a more equitable distribution.

Unknown is his exact method.

An expert proposes a solution to the power issue

Engineer Adesola Oyedotun, a System Power Engineer in one of the Discos, expressed optimism that big improvements in the power industry will be ensured with the next government and claimed that the sector may be on its way to a thorough reform.

The power expert told xanderetch in Abuja that although the industry faces challenges along the value chain of business generation, transmission, and distribution, they are not insurmountable. He claimed that his experience in the industry places him in a good position to offer the sector his professional advice.

Oyedotun claimed that because the electricity sector issue had persisted for a considerable amount of time and no one administration or corporation could be held accountable, the Tinubu administration’s top priority should be to find a long-term solution.

If we have the sincere spirit, will, and resolve to take on the current crisis in the power sector head-on, the solution is not inconceivable, he claimed. This is not a complex subject. The electricity sector problem has actually been lingering for a very long time, but we are optimistic that with the new government in office, fixing those challenges facing the industry is very likely.

“I have faith that they can handle the long-term problems facing the power sector.

Remember that on November 1, 2013, the power sector was privatized. It was previously managed by the Power Holding Company of Nigeria, or PHCN, before the privatization. However, a reform in the industry created eleven Discos across Nigeria for the Distribution branch of the company.

“As a result, we have Ikeja, Enugu, Benin, Ibadan, Port Harcourt, Eko, and other places. That has aided the sector in connecting with the public, but there is room for improvement.

Therefore, I think that the incoming government of President Bola Tinubu can do a lot with the already created base.

Zones of coverage

The electricity expert made the following suggestions as to what should be done to ensure that more areas are served in terms of distribution:

“I think this government can do more in the area of coverage. For instance, consider a single disco covering four states. Without a doubt, it won’t produce the best outcomes.

“It won’t be very effective with millions of clients in the need for supply. Therefore, a second look at the four states in one Disco’s hand is possible.

As one Disco considers the needs in Abuja, Kogi, Nasarawa, and Niger, how might you handle the transformer issue? Meeting those standards in four states will be challenging.

legislation permitting states to produce energy

However, he continued, “states have work to do with regard to power, especially in light of the new bill signed by former president Muhammadu Buhari before leaving office, which I believe a step in the right direction.

“The bill has given each state the authority to start producing and distributing electricity. This will provide tremendous support for the development of power.

“I think each state can capitalize on this, leading to the opening of businesses and the creation of more jobs. If the states join the battle, we should be free of the sector’s issues.

How the FG, states, and private sector can work together

Engineer Oyedotun explained the situation about the electricity sector being on the exclusive list and how the state can still enter, stating that it is still feasible because it is comparable to the current situation.

“Now, if you look at it, you will realize that the government currently has a 40% stake in the sector,” he said. That indicates that the investors own 60% of the business.

“So it’s still feasible to further discuss how the state may intervene and you also let them know their stake, at a roundtable.

“Under the new law, states may opt to act independently. However, it is obvious that only a very small number of states now have the financial strength to engage into a capital intensive and long-term investment like power given that the majority of states are having trouble paying employees, funding education, etc.

“States can promote private sector-led investments in their states on their own or in cooperation with other governments. Recently, Lagos State introduced its own.

This means that having three interested parties generating power is not too tough for the sector. It seems like a really good solution to me.

“The state’s percentage could come in and ease off the current challenges as opposed to having 60/40 percent for both the investors and the federal government.”

A long-term investment is the power sector.

The power system engineer commented on the power sector’s long-term investment potential and how it could be very profitable in the future rather than just now: “Investors in this sector must understand that investment into distribution value chain of this business is a long time investment and must not be compared to investment in banking sector or other sectors of Nigeria economy.”