“We are just in a helpless situation that needs help from government. It is not just about the DisCos alone but the entire value chain because if one dies, the others die too.”
He insisted that the Discos were not making profit because of operational costs, nothing that “we are only struggling to recover our cost.”
He explained how the MYTO 2015 implemented in February benchmarked the foreign exchange rate of $1 – N197 to compute the prevailing the tariff.
“The major part of the liquidity issue is that foreign exchange keeps fluctuating. As at December 2015, it was N197. By June 2016 it became N293 and now it is N360 at official rate. This is a difference of N163.
“What that means is that the cost of Generation Companies (GenCos) producing energy has increased because they buy the gas in US dollars. Even if we are paying the same amount that was agreed in December 2015, that amount is now giving a lesser percentage of payment,” Oduntan explained.
The Nigerian Bulk Electricity Trading Plc (NBET) is misleading as what the DisCos pay for monthly energy was unchanged last year but the value has been affected by Forex, he stressed.
His words: “Although the cost that comes back to DisCos is higher, they are still expected to sell at the MYTO price because it has not been reviewed. Cost of energy has gone up but the tariff remains the same. We are not clamouring for a tariff rise but government needs to intervene because the shortfall in the sector has reached N809.8billion.They fixed the tariff in December 2015 but in the wisdom they suspended it to February. The month of January that was left out cost the industry N12.8billion. It should have commenced on the 1st of January.”