Businesses groan as poor energy increases OpEx, fear of shutdown

Businesses across different sectors have lamented the worsening state of power supply in the country, which they said has forced them to rely more on alternative sources of energy. They said the alternatives are expensive, unsustainable and constitute a threat to their continued survival.

While the different distribution companies (DisCos), have given different reasons in the last few weeks to explain the continued drop in power supply to businesses and homes, industries are suffering, as they are forced to rely on diesel and petrol-powered generators to sustain production.

Managing Director of Kazih Kits Limited, Chinedu Grace Otakpor-Azih, lamented the power situation, saying it is stalling production. “We use both diesel and petrol generators, the former for day production while the latter is for overnight production. We spend about N60,000 on petrol weekly and I have lost track of what we spend on diesel but it is a lot.” She said they are currently shopping for alternatives, including switching to gas in a bid to reduce expenses.

“The light situation is very poor, sometimes, there is no power for days. How can we remain productive like this? Despite using fuel to produce, we cannot increase prices so much because the economy is bad in general and spending power has reduced but it cannot be helped again. The DisCo will still send us bills to settle despite getting little to no power. A bundle of cotton material moved from N18,000 to N50,000 in weeks; this is in addition to rising fuel costs and other operating costs, which are all shooting up as well. We are looking to source cotton locally but what is being produced locally is of far inferior quality,” she said.

A manager at Future Hope Interior Designs Limited, Dapo Salau, regretted that the electricity situation has forced them to lay off some casual staff and cut down drastically on production. Describing the power situation as worrisome, he said they use as much as N25, 000 diesel daily and when they realised it was not sustainable, had to cut back on production and because of that, let some workers go. He worried that if the situation does not improve, they would be forced to completely halt production. “The cost of materials has tripled overnight and when you factor in diesel costs, we are running at a loss. We cannot afford to raise the prices of our goods too much so as not to scare customers away. Please let the authorities in charge save our businesses and livelihood by giving us constant power, we don’t want to have to close down,” he said.

Immediate past Manufacturers Association of Nigeria (MAN) chairperson, Apapa branch, Frank Ike Onyebu, regretted that despite operating in an industrial estate, the power situation has degenerated so badly. He added that it was not surprising however as this is the dry season but lamented that the outages were too frequent and sometimes, last days. “We have come to accept that 24/7 electricity is a distant dream but what we are getting now is 7/24, seven hours in 24 if we are lucky as it is often less than that. Generation and transmission, in particular, is still very poor despite all the reforms the government claims to have carried out in the sector. Most of the transmission and distribution lines inherited from the defunct NEPA by the DisCos are still in use and sadly they are all obsolete. Which is why when there is a break somewhere or wind blows, the light goes off for hours or even days.”

Onyebu added that manufacturers need constant power supply but are not getting it. He noted: “In the last two weeks, we have used 30,000 litres of diesel coming to us at 1,100 per litre. This is how much we are bleeding and will worsen if the power situation is not addressed soon.” He added that the DisCos are probably not bothered about delivering service to customers because they get subsidy from the federal government. “Every month, our electricity bill is around 70-80 million Naira without fail, yet we still spend millions on diesel and petrol to fuel our generators. One would expect that manufacturers being charged millions would be given a little priority, yet, all we get is disregard and darkness. The situation is beyond frustrating and we are dealing with too many problems at once. If this government is serious about preventing this industry from total collapse, power must be fixed immediately,” he concluded.

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