Nigeria’s Energy Crisis

Just as the ink on my article last week about this administration’s mismanagement of the power sector since 1999 was starting to dry up, the country was dealt another knock out punch by the Power Holding Company of Nigeria (PHCN). PHCN through its Public Affairs unit informed the country that power generation dropped again by almost 60 per cent from over 3,000MW to below 1,500MW.

The blame was placed squarely on Shell Petroleum Development Company (SPDC), which had shut down its gas gathering and compression facilities for routine maintenance as well as Agip’s new Independent Power Plant (IPP) at Okpai. Agip we were told had also shut down some of its generating units for maintenance. Given our penchant for not making provisions for any form of back up, PHCN went on to mention that the situation was further exacerbated by the low reservoir levels at the hydro power stations as a result of the dry season.


Upon reading the report I was deeply disappointed for a number of reasons. First, when I wrote my article last week, my assessment was completely inadequate of what I personally knew is a wider problem that spans the socio-economic unrest in the Niger Delta to the lack of an integrated energy policy framework encompassing the electricity, and oil and gas sectors.

Secondly, by trying not to offend the sensibilities of the majority of readers and in particular the labour unions who over the years have taken umbrage with my well known stance on the role price distortions in the energy sector have played in entrenching market inefficiencies and supply disruptions, I merely skirted around the issues of the root cause of a crisis that has set us back by at least a decade.

This Day (Lagos)