The Federal Authorities, on Monday, introduced that the brand new worth of pure gasoline for energy era firms is now $2.42 per metric million British thermal unit, greater than the earlier charge of $2.18mmbtu.
Nigeria generates over 70 per cent of its electrical energy from thermal energy vegetation which are fired by gasoline. Due to this fact, the rise in the price of the commodity could result in a hike within the tariff payable by energy customers as soon as the Nigerian Electrical energy Regulatory Fee carries out one other tariff overview.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, an company of the Federal Authorities, unveiled the brand new home base worth and wholesale costs of pure gasoline for 2024 in an announcement on Monday.
The NMDPRA additionally pegged the price of industrial gasoline at $2.92mmbtu, up from the earlier value of $2.5mmbtu. The announcement was signed by the Chief Government, NMDPRA, Farouk Ahmed.
Recall that the Multi-12 months Tariff Order launched by NERC in January 2024 for the electrical energy distribution firms was calculated based mostly on the earlier worth of pure gasoline.
Due to this fact, going by the newest value of the commodity, there’s a excessive tendency for an upward overview of energy tariffs, as gasoline is a significant part utilized in energy manufacturing.
Fuel producers together with worldwide and home oil and gasoline firms, have repeatedly referred to as for the upward overview within the worth of the product, stressing that this could be an incentive to ramp up manufacturing.
Within the announcement on Monday, Ahmed mentioned the Petroleum Trade Act 2021 assented to by the President on August 16, 2021, and gazetted in August 2021, supplied a transparent regulatory framework for the dedication of a market-based pricing regime for the home gasoline market.
The NMDPRA boss additional acknowledged that the newest motion was taken in keeping with part 167, the third and fourth schedule of the PIA 2021, which mandated the regulator to find out the Home Base Worth and the marketable wholesale worth of pure gasoline provided to the strategic sectors.
He mentioned, “The DBP on the marketable gasoline supply level beneath Sector 167(1) and different provisions of the PIA shall be decided based mostly on laws which incorporate amongst such different issues, the next ideas.
“(a) The worth have to be of a degree to carry ahead ample pure gasoline provides for the home market on a voluntary foundation by the upstream producers.
“(b) The worth shall not be greater than the typical of comparable pure gasoline costs in main rising nations which are vital producers of pure gasoline.
“(c) Lowest value of gasoline provide based mostly on three-tier value of provide framework. (d) Market-related costs tied to worldwide benchmarks.”
The NMDPRA, due to this fact, emphasised that it had set the “2024 Home Base Worth at $2.42/MMBTU and wholesale costs for pure gasoline in strategic sectors, following consultations with stakeholders and in compliance with the PIA and Fuel Pricing Laws.”
