THE Federal Government has announced that it can only consider increasing electricity tariff by the time electric power supply becomes readily available to Nigerians.

Emmanuel Egbogah, special adviser to the President on Petroleum Matters stated this in Lagos recently at a Business Luncheon organised by the Institute of Directors (IoD).

Dr. Egbogah acknowledged that the current electricity tariff did not support the long run sustainability of the country’s gas sector, but pointed out that government would not increase the cost of electricity until it becomes available to consumers.

Government is rather introducing differential pricing policy in the electric power sector to ensure disparity in payment for power consumed in rural and urban areas.

By this arrangement, urban dwellers will pay more than inhabitants of rural areas.The setting up of the Rural Electrification Agency is geared towards the realisation of this objective.

The Presidential adviser maintained that the country’s power sector had stretched the supply system beyond its limit, adding that domestic gas supply in the short and medium term must take cognisance of both the power sector and industrial demand.

Egbogah, who was represented by Mohammed Ibrahim, chairman of establishment committee of National Petroleum Directorate (NPD) and National Petroleum Research Center, also noted that power supply planning in short term must be rationalised to cater for an ordered proportion of power and industries.

According to him, a rationalisation of the power sector short_term generation aspiration has been recommended.
This he said will bring focus to re_aligned and realistic expectation for a generating capacity that is attainable in a specific period.

This generating capacity will also take into consideration gas supply availability and electricity supply transmission capacity.

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

The international oil companies (IOCs), which are the gas producers favour gas export in the form of Liquefied Natural Gas (LNG), obviously to recover costs.

Government has made meeting domestic gas supply obligation a requirement for IOCs to export gas, but this is not supported by any legislation.

Aside the cost recovery motive, there are also absence of world class agreements between the IOCs and the government on gas exploration and production.

The domestic gas agreements on the other hand are so weak that they cannot protect the interest of gas suppliers.

Egbogah disclosed that government had resorted to negotiation with the gas producers to solve the problem of domestic gas supply in the country. The petroleum engineer highlighted domestic gas supply obligation regulation, oil and gas industry reforms, gas pricing framework and concept of aggregate pricing as some of government’s strategic interventions.“Time will tell whether these efforts will have silver bullet,” he said.

Earlier in his speech, Olusola Dada, president of IoD said the theme of the Business Luncheon, which was “The Nigerian Energy Crisis, any Silver Bullet”, was apt because the country’s energy industry was the engine room that prepared the baking of the national cake.

He noted that to underscore the importance of the sector, President Umaru Musa Yar’ Adua had repeatedly threatened to declare emergency in the sector.