Economy
Sokoto Plant To Generate Power At N178/KW
By Dipo Olowookere
Sokoto State power plant will generate electricity at N178 per kilowatt, more than three times its current price in the region, Daily Trust investigations have shown.
The 38-megawatt Independent Power Plant (IPP) was built by the state at the cost of N3.8 billion and will consume 33, 000 diesel daily.
Data from the Nigerian Electricity Regulatory Commission shows that the highest approved price for residential customers under the Kaduna Distribution Company (Kedco), where Sokoto belongs, is N45 per kilowatt.
The plant “consumes 33,000 litres” of diesel daily, the director-general of the project, Mr Umar Bande, said during a test run of the plant last week.
Daily Trust findings show that the state will be spending an average of N6.8 million daily on diesel at a market value of N206 per litre. By this, the plant will consume N204 million worth of diesel every month.
The annual cost of diesel to be consumed by the plant is N2.47 billion per annum, more than two-third of its worth on fuel every year.
By the estimated 33,000 diesel per day, the plant will gulp 868 litres of diesel to generate one megawatt (1000 kilowatt), amounting to N178,808 for every megawatt, using a market value of N206 per litre of diesel. A kilowatt generated by the Sokoto plant will therefore cost N178.8.
Kaduna Electric, whose network will convey the power to customers, presently sells electricity at N45.76 per kilowatt hour, according to the 2015 Multi-Year Tariff Order (MYTO) approved by NERC.
The Sokoto plant, which contract was awarded in November 2008, has a multiple type turbine that can use diesel, gas or LPFO, Bande said. Officials also said the plant would begin operation after the transmission infrastructure and other minor aspects are completed.
Daily Trust learnt that Kaduna Disco gets an average of eight percent of power daily from the national grid through the Transmission Company of Nigeria (TCN), which it allocates to Kaduna (66 percent), Kebbi (17 percent), Zamfara (nine percent) and Sokoto (eight percent).
The MYTO 2015 shows that residential customers (R2-SP) presently pay N26.37 for every kilowatt hour; the R2-TP pay N28.05; residential customers 3 (R3) pay N42.74, and R4 customers pay N45.76.
Commercial customers under class 1 (C1) pay N33.17; C2 pay N38.88; and C3 pay N44.22. For the industrial customers, D1 customers pay N36.95; D2 pay N39.13, and D3 pay N44.22.
Customers under category A1 (agriculture and public agencies) are paying N33.17, A2 pay N38.56, and A3 pay N39.13. Other customers who use streetlights are put under ST1and they pay N30.30/kilo watt hour.
‘Liquefied Petroleum Gas is better’
A power sector and energy expert, Mr Dan Kunle, said for Nigeria which recently agreed to support clean energy initiative and climate change, Liquefied Petroleum Gas (LPG) could have been the fuel source for the plant as it could be brought in from nearby Niger Republic or from the Niger Delta rather than trucking diesel at a high price.
He however said the state government could only sustain the operation for three to five years by subsidising the fuel cost if having sustained power supply is its key focus at the moment.
“There is nothing government cannot subsidise if it is determined to do that in the most scientific approach. If that is the energy need of Sokoto State Government, they can put that into use and have uninterrupted power per day for the next few years.
“If the impact it will create for industrialization will flow back, then that is good and sustainable. Americans subsidize power up to N200m daily but they do it on scientific basis. It must be subsidized if that is what the government wants,” he said.
Why project is delayed
Daily Trust reports that the project, initially expected to be completed within six months in the first quarter of 2009, was stalled for eight years over what state officials described as “unforeseen circumstances.”
The deadline was first shifted to September 2009, later to December 2010 and to July 2011. It was then extended to September 2013 and later August 2014 and the dates keep changing. Daily Trust findings revealed that the source of fuel for powering the plant is the major reason behind its continuous delay.
“The project was conceived without a proper feasibility study. That is why the issue of fuelling the plant was not properly addressed,” a source said.
Another source said: “They weighed the use of diesel to power the plant’s generators which will consume dozens of trucks of diesel per day. The cost, logistics, safety and even availability of diesel dissuaded the officials from that option.”
But the Chief Operating Officer of the contracting firm, Vulcan Elvaton Ltd, Mr Franklin Ngbor said last week that the turbine of the project had already been tested three times.
He said the synchronisation of the plant with the fuel tank and the main evacuation line, down to the transmission line is the only thing remaining.
“The plant when fully completed, finally fired and integrated into the national grid, can work for five consecutive years, non-stop,” he said.
‘It will boost Sokoto’s economy’
During the last test run, the Secretary to the State Government, Bashir Garba, said an agreement will soon be signed between the state government and the TCN on the evacuation of the power to the national grid.
He said the project was necessitated by the epileptic power supply to the state from the national grid, adding that the state will enjoy nearly 24-hour power supply when the plant becomes fully operational.
“This will also eventually boost the socioeconomic landscape in the state, curb poverty, restiveness and unemployment, among other myriad of direct and indirect benefits,” he said.
Daily Trust
By Adedapo Adesanya
Trading activities ended in a stalemate on the floor of the NASD Over-the-Counter (OTC) Securities Exchange on Wednesday, with no single price gainer or a price loser at the close of business.
As a result of this development, the market capitalisation of the bourse remained intact at N1.03 trillion, as the NASD Unlisted Securities Index (NSI) also remained unchanged at 743.15 points.
The unlisted securities market closed flat in the midweek session amid low investor appetite for the market, as attention shifted to the fixed-income market, where the Central Bank of Nigeria (CBN) sold treasury bills at the primary market, with the stop rate over 14 per cent.
Data from the bourse showed that the volume of securities traded yesterday was abysmally low as it went down by 99.9 per cent to 8,299 units from the 20.1 million units transacted a day earlier.
Likewise, the value of shares traded during the session dropped to N1.2 million, 97.3 per cent lower than the N44.5 million posted in the preceding trading day.
These transactions were carried out yesterday in nine deals, 75 per cent lower than the 36 deals executed on Tuesday.
Geo-Fluids Plc remained the most traded stock by volume on a year-to-date basis with a turnover of 482.1 million units valued at N544.1 million, UBN Property Plc occupied second place with the sale of 365.8 units worth N309.5 million, while Industrial and General Insurance (IGI) Plc was in third place with the sale of 71.1 million units valued at N5.1 million.
Also, VFD Group Plc ended the session as the most traded stock by value on a year-to-date basis with a turnover of 7.3 million units worth N1.7 billion, Geo-Fluids Plc was in second place with a turnover of 482.1 million units worth N544.1 million, while UBN Property Plc was in third place with the sale of 365.8 million units valued at N309.5 million.
By Adedapo Adesanya
The Nigerian Naira appreciated against the US Dollar in the Peer-2-Peer (P2P) and the Investors and Exporters (I&E) windows of the foreign exchange market on Wednesday, March 30, but depreciated in the black market.
In the P2P segment, it gained N3 against its American counterpart to quote at N764/$1, in contrast to the N767/$1 it was traded on Tuesday as the demand for cryptos, which most traders in this category use the funds to buy, was relatively mild.
In the I&E window or the spot market, the Naira appreciated against the greenback yesterday by 51 Kobo or 0.11 per cent to settle at N461.24/$1 compared with the previous day’s N461.75/$1, according to data obtained from FMDQ Securities Exchange, with the forex turnover put at $74.31 million.
But in the parallel market, the domestic currency depreciated against the US Dollar in the midweek session by N4 to trade at N747/$1 versus Tuesday’s exchange rate of N743/$1.
Also, in the interbank window, the Naira lost N1.93 against the Pound Sterling to sell at N567.68/£1 versus Tuesday’s N565.52/£1, and against the Euro, it slid by N2.25 to at N499.21/€1 compared with the preceding day’s N496.66/€1.
Meanwhile, the digital currency market swayed to the bulls yesterday as most of the tokens tracked by Business Post ended in the green territory amid better-than-expected consumer confidence figures from the United States.
Data from the US Conference Board showed that its monthly survey rose to a reading of 104.2 basis points, better than the 101 mark expected, lifting Bitcoin (BTC) by 4.2 per cent to $28,519.76, as Ethereum (ETH) rose by 0.5 per cent to $1,788.52.
Solana (SOL) grew by 2.1 per cent to $21.08, Dogecoin (DOGE) gained 1.4 per cent to sell at $0.0751, Litecoin (LTC) increased by 0.6 per cent to $90.14, while Cardano (ADA) chalked up 0.5 per cent to quote at $0.3797.
However, Ripple (XRP) dropped 0.4 per cent to trade at $0.5336, Binance Coin (BNB) lost 0.2 per cent to settle at $313.02, and Binance USD (BUSD) and the US Dollar Tether (USDT) traded flat at $1.00 apiece.
By Adedapo Adesanya
Oil edged lower on Wednesday as investors took profits from two straight days of gains amid supply tightness, causing Brent crude to lose 37 cents or 0.5 per cent to trade at $78.28 a barrel, and the US West Texas Intermediate crude to shed 23 cents or 0.3 per cent to sell at $72.97 per barrel.
On the supply side, worries of tightness after an unexpected draw in US oil stockpiles and a halt to some Iraqi Kurdistan oil exports were partially offset by a smaller-than-expected output cut in Russia.
About 450,000 barrels per day of crude export were halted on Saturday from Iraq’s semi-autonomous northern Kurdistan region following an arbitration decision.
The shutdown followed an International Chamber of Commerce court ruling in favour of Iran in a case against Turkey that claimed that the latter should not have allowed for the flow of oil from Kurdistan to Ceyhan without the express approval of the Iraqi government.
Initially, Turkey said it would abide by the court’s decision, but this week, the Turkish Ministry of Energy and Natural Resources said in a statement that the court had in fact ruled that Iraq should compensate Turkey for violating an oil export deal the two countries had.
Also, it was reported that Russian oil production fell by around 300,000 barrels per day in the first three weeks of March, less than the targeted cuts of 500,000 barrels per day.
US crude oil stockpiles fell unexpectedly last week, the Energy Information Administration (EIA) said, as refineries ramped up operations after maintenance season and US imports fell to a two-year low.
The EIA reported a crude oil inventory draw of 7.5 million barrels for the week to March 21 compared with a relatively modest inventory build of 1.1 million barrels for the previous week.
At 473.7 million barrels, the EIA said, crude oil inventories are 6 per cent above the five-year average for this time of the year.
In fuels, meanwhile, the authority estimated a mixed inventory picture after last week’s major draws in both gasoline and middle distillates pushed oil prices higher.
Analysts also said that concerns over banking issues have subsided for now in temporarily relieving expectations for a recession.
Pressure came as the US Dollar edged higher against most major peers, pausing its recent declines. A stronger greenback hurts oil demand as crude becomes more expensive for buyers who hold foreign currencies.
