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Manufacturers spend N72.6 billion yearly on diesel to power ‘gensets’

By on May 29, 2012

MEMBERS of the Manufacturers Association of Nigeria (MAN) have been spending over N72. 6 billion yearly on Automotive Gas Oil (AGO), otherwise known as diesel, to power their respective generating sets, sequel to the lingering power supply crisis in the country.

The expenditure profile was disclosed on Sunday in Lagos by a council member of MAN, Mr. Reginald Odia.

This otherwise unavoidable expenditure translates to over 40 per cent of the total production cost for industrialists.

MAN and National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), had at various for a, stressed the need for the Federal Government to ameliorate the challenge of inadequate power supply for the growth of the industrial sector.

Odia, who is also the Chairman, Electronics and Electrical Sectorial Group of MAN, said at a town hall meeting in Lagos, that the heavy cost incurred on diesel was due to the irregular power supply by the Power Holding Company of Nigeria (PHCN).

He added that though members of MAN paid PHCN bills of over N120 million monthly for electricity consumption, PHCN merely supply the association less than 1,000 MW.

This, he noted, was less than the 3,000MW electricity required by MAN, adding that the cost of energy had affected the business of the members of the association.

Odia added that the expenditure on alternative power supply has made the cost of doing business in Nigeria, the highest on the continent.

He said the development explained the decision of some companies to relocate their plants from Nigeria for other parts of Africa  “where it is much easier to do business”.

Odia further complained that members of the association were not consulted by the Federal Government when the new tariff for electricity was being fixed.

According to him, government ought to have considered of the input of manufacturers, being strategic stakeholders in the electricity sector.

He stated: “The record we have through the Nigerian Electricity Regulation Commission (NERC) and other agencies is that about 40 per cent of Nigerians have access to electricity, which translates to the remaining 60 per cent groping in darkness. The point is that even the 40 per cent does not have adequate and enough power supply and the same 40 per cent is said to require 10,000 MW. Right now we are having less than 5,000 MW.

“There is therefore the need to ensure complete closure of the gap. So, leaving government to do it alone is not possible. If you ask, I have not seen any government that wants to carry everybody along and drive through the Nigerian problem without having issues with the people, including the argument whether to privatise or not and it is obviously wrong for the workers to say we are not ripe for privatisation”.

NACCIMA’s President, Herbert Ajayi has implored the Federal government to ensure speedy conclusion of the privatisation of the Power Holding Company of Nigeria (PHCN).

Ajayi also tasked the government to ensure assiduous implementation of the road map for electricity power sector reform in order to inject private capital and management expertise into the nation’s power sector.

He said the development would ensure provision of electricity to Nigerians and industries 24 hours daily in no distant time.