This Day (Lagos)

19 March 2008
Posted to the web 19 March 2008

Chika Amanze-Nwachukwu
Lagos

The Federal Government is considering the introduction of differential pricing policy in the power sector to ensure disparity in payment for electricity consumption in rural and urban areas.

Presidential Adviser on Petroleum Matters, Dr. Emmanuel Egbogah who made the disclosure yesterday at a Business Luncheon organised by Institute of Directors (IoD) in Lagos , said under the new policy, urban dwellers will pay more than those living in the rural areas.


He stated that the Rural Electrification Agency has the task of ensuring the realisation of this objective.

Egbogah, who was represented by Mohammed Ibrahim, Chairman, Establishment Com-mittee of National Petroleum Directorate (NPD) and National Petroleum Research Centre admitted that the current electricity tariff does not support the long run sustainability of the Nigeria 's gas sector, but maintained that government would not increase tariff now until power supply increases.

While noting that the country's power sector had stretched the supply system beyond its limit, the Presidential Adviser noted that domestic gas supply in the short and medium term must take into consideration the power sector as well as industrial demand, adding that short term supply planning must be rationalised to cater for an ordered proportion of power and industries.

He further disclosed that a rationalisation of the power sector short-term generation aspiration has been recommended, as according to him, the measure will bring focus to re-aligned and realistic expectation for a generating capacity that can be attained within a specific period.

Egbogah also hinted that government is currently negotiating with gas producers to solve the problem of domestic gas supply in the country, adding that the generating capacity will also take into consideration gas supply availability and electricity supply transmission capacity. He listed domestic gas supply obligation regulation, oil and gas industry reforms, gas pricing framework and concept of aggregate pricing as some of government's strategies put in place by government to remedy the situation, noting that "time will tell whether these efforts will have silver bullet".

Nigeria has the largest gas reserves in Africa but the gas is not readily available until certain level of oil exploration has taken place.

http://allafrica.com/stories/200803190280.html