VenturesNow

Nigeria: Electricity tariff hike imminent as govt raises gas price

Published

4 months ago

April 2, 2024

The price of natural gas for power production businesses has been revised by the Nigerian government to $2.42 per metric million British thermal units (MMBtu) as of Monday. This is an increase from the previous rate of $2.18mmbtu.

More than 70% of Nigeria’s electricity is produced by gas-fired thermal power facilities. As a result, when the Nigerian Electricity Regulatory Commission conducts another tariff review, the increased cost of the item can increase the rate that power users must pay.

The previous price of natural gas was used to determine the Multi-Year Tariff Order, which NERC announced in January 2024 for the power distribution firms.

Since gas is a major component utilized in the production of power, there is a high tendency for an upward revision of power tariffs based on the most recent cost of the commodity.

Gas producers have consistently demanded an increase in the product’s price, citing both domestic and foreign oil and gas businesses, emphasizing that doing so would encourage them to increase production.

Ahmed stated in the announcement on Monday that a clear legislative framework for determining a market-based pricing regime for the domestic gas market was established by the Petroleum Industry Act 2021, which was gazetted in August 2021 and approved by the President on August 16, 2021.

The head of NMDPRA went on to say that the most recent action was done under section 167, the third and fourth schedules of the PIA 2021, which required the regulator to ascertain the marketable wholesale price of natural gas delivered to the strategic sectors as well as the Domestic Base Price.

He said, “The DBP at the marketable gas delivery point under Sector 167(1) and other provisions of the PIA shall be determined based on regulations which incorporate among such other matters, the following principles.

Related Topics:electricity Featured Gas Price

Click to comment

VenturesNow

Nigeria has received $10.9 billion multi-sector investments from AfDB— Official

Published

4 days ago

July 23, 2024

Ifeoluwa Dada

Nigeria has received $10.9 billion from the African Development Bank (AfDB), comprising $4.9 billion in public and private sector initiatives.

AfDB Director-General of the West Africa Region, Lamin Barrow, said the bank’s Nigeria funding approvals total $10.9 billion since it started operations.

Barrow made the revelation at the Second Interactive Session and Workshop on Developing Bankable Business Proposals/Business Plans for Youths in Agriculture in Abuja on Monday.

It was part of the bank’s 60th anniversary celebrations with stakeholders. Nigeria is the AfDB’s largest shareholder, and the bank’s relationship with it has grown, Barrow said.

The AfDB invests in Nigeria’s energy, power, transport, water, and sanitation infrastructure.

“Over the last 60 years, the Bank has grown into a trusted partner and the continent’s premier development financial institution.

“Our cooperation with Nigeria has expanded over the years, especially considering that Nigeria is the largest shareholder.

“Since it started operations in the country, cumulative financing approvals have reached 10.9 billion dollars and our portfolio currently stands at 4.9 billion dollars supporting projects in the public and private sectors,” he said.

After taking office eight years ago, AfDB President Dr Akinwumi Adesina prioritized the High 5—Power, Feed, Industrialize, Integrate, and Improve Africa’s quality of life—Barrow added. He said these were accelerators for achieving the SDGs and Agenda 2063 ambitions. The projects and programs supported during this time have reportedly affected over 400 million individuals.

VenturesNow

Analysts expect Egypt’s economy to rise 4.0% in 2024/25

Published

4 days ago

July 23, 2024

Ifeoluwa Dada

A recent study that sampled seventeen economists by Reuters has predicted slower economic growth for Egypt in April after a $8 billion IMF accord in March.

The median projection for GDP growth in the fiscal year starting July 1 was 4%, down from 4.35% in April and 4.15% in January.

The poll predicted the GDP grew 2.9% in the fiscal year ending June 30. This is below their April and January predictions of 3% and 3.5%. Poll: 2025/26 growth should rise to 4.99%.

After the IMF agreement, Capital Economics’ James Swanston predicted slower growth due to tighter fiscal and monetary policies and a weaker pound.

“The overall net impact is that economic growth will be weaker this fiscal year, but there are reasons to be more optimistic on GDP growth from FY2025/26 onward,” Swanston said.

Egyptian tourism and Suez Canal revenue have slowed due to the Gaza crisis, which has cut Egypt’s foreign revenue by more than half.

Egypt’s planning ministry predicted 4.2% growth in 2024/25 on June 2. Analysts expect the Egyptian pound to fall to 49.50 per dollar by June 2025 and 52.50 by June 2026.

Before dropping it in March 2024, the central bank kept the pound at 30.85 per dollar. It’s roughly 48.40 per dollar.

The survey forecast 20.5% headline inflation in 2024/25 and 12.05% in 2025/26. In June, inflation dropped to 27.5% from a record high of 38.0% in September, exceeding the central bank’s objective of 5%-9%.

The analysts expect the central bank’s overnight lending rate to drop to 21.25% by June 2025 and 15.25% by June 2026.

Foreign money shortages have slowed the Egyptian economy. However, a $24 billion real estate transaction with the UAE in late February, a significant currency devaluation, and a $8 billion IMF accord in early March have mitigated that.