Nigerians are currently groaning in an epileptic power supply just one month after the power distribution companies increased tariffs. Power cuts are rampant and last for hours daily with most neighborhoods getting between 2 – 4 hours daily.

Data from the website of the Presidential Taskforce on Power suggest power generation has dropped to about 3601.78MWH and sent out just 3,531.88MWH. Nigeria achieved a peak generation  of 5,074.7MWH on February 3rd 2016 indicative of a drop of about 29% within a month.

When power supply is this bad there is always one major reason. Gas shortages! According to reports, gas supplies to the Gencos cut drastically due to pipeline vandalisation. Without gas the Gencos cannot generate power supply to the Discos which the latter cannot distribute to consumers. Nigerian Power Generators are mostly powered by Gas supplies from Upstream oil and Gas companies such as the Nigerian Gas Companies, Shell, Seplat etc. Without gas, they can’t power their turbines which is why power supply is erratic.

Another reason attributed to the drop in power supply are the bad transmission lines we have in the country. The transmission company of Nigeria evacuates power supply generated by the Gencos and then transmits to the Discos who then step it down and distribute to consumers. According to some Discos, Transmission networks around the country have several faulty transformers and high tension cables which takes weeks and sometimes month’s to repair leading to erratic power supplies in areas where the faults are concentrated in.

Nigerians really do not care about all these reasons as all they want is reliable power supply. This makes the current situation very risky for investors in the power sector as cut in power supply typically leads to high collection losses leading to accumulation of receivables. Things could even get worse with the new tariff set to be implemented for post paid customers when they receive their bills in March.

The post above and its ensuing comments, if any, is purely the opinion of the writer(s). It therefore should never be considered as an investment advise of any sort. If required, readers should please consult a competent professional financial adviser for any investment decision.