MAN: Fuel price hike made us spend N20bn more on alternative power in 2020

The Manufacturers Association of Nigeria (MAN) says it spent N81.91 billion on alternative power supply in 2020.

In its bi-annual review of the economy released on Tuesday, the manufacturers said the amount was a sharp increase from the N61.38 billion they spent in 2019.

The association asked the federal government to review downward the current increment in electricity tariff in the country.

MAN also added that the COVID-19 pandemic had a negative impact on the manufacturing industry as a result of the global lockdown, adding that the sector fell into an economic recession in the third quarter of 2020.

“Energy information generated from the sector has shown consent improvement in electricity supply to the manufacturing sector. In the 2nd half of 2020 electricity supply from the distribution companies to the sector increased to 12 hours on a daily average from 10 hours per day on the average recorded since the 1 st half of 2019. Average daily power outage had constantly averaged 4 times per day,” the association said.

“However, expenditure on alternative energy in the 2nd half of 2020 increased to N57.75 billion in the 2nd half of 2020 from N34.70 billion recorded in the corresponding half of 2019; thus, indicating N23.05 billion or 66.4% increase over the period. It also increased by N33.59 billion or over 100% when compared with N24.16 billion recorded in the 1 st half of the year.

“Expenditure on alternative energy source in the sector stood at N81.91 billion in 2020 as against N61.38 billion recorded in 2019. The increase in alternative energy expenditures in the sector was attributed to the general high inflationary pressures in the economy. However, specifically, the increase in the petrol pump price exerted significant influence on prices of some of the fuel used by the sector to generate electricity.

“The year 2020 was a very difficult year for the economy and manufacturing sector due to the onslaught of COVID-19 Pandemic. COVID-19 had staggering devastation on global economies as evident in the huge death toll of manpower; the crashing of crude oil price, the slowing of global supply and demand; and the total halting of economic activities through the lockdown.

“The pandemic had a crushing impact on the manufacturing sector as the sector fell into economic recession in the 3rd quarter of 2020. At the moment and following the impact of COVID-19 productivity in the sector is at the lowest and therefore require deliberately orchestrated action to rekindle significant productive activities in the sector.”