Reliable electricity supply has been one of Nigeria’s largest social and economic development barriers.
Currently over 95% private industries in Nigeria today depend on at least one generator which either operate on Premium Motor Spirit (PMS) or Diesel  for their power requirements due to the inadequate supply from electricity distribution companies (DISCO) in the country which relatively comes at a cost.
Some companies even rely on 100% diesel generation. As the blended tariff incorporates a higher DISCO percentage, total residential, commercial and industrial electricity costs will fall.
Speaking during an interview on the electricity tariffs in Nigeria recently, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, stunned Nigerian when he  said “[for you to have good electricity supply, you need to pay a little more”]. He also noted that some improvement has been recorded in generation, illustrating the benefits are already being felt.
However, as the quantity of power generated decreased and demand increase, the need to switch to natural gas becomes expedient and timely as this will reduce dependency on back up diesel generation, which is significantly more expensive than grid fired power as well as the strain on the foreign exchange markets for US dollars to import Fuel.
The rate of switching to natural gas generators is very fast as both the pipeline infrastructure widens and awareness of CNG grows in Nigeria. Firms such as Powergas are leading the CNG development in Nigeria. Analysts forecast that natural gas fired generation is likely to dominate the market given the clear financial savings.
Chairman of Cummins Cogeneration (the parent investor company for Powergas), Deepak Khilnani, said “we have been heavily investing in our service capabilities in Nigeria so that we are able to deliver reliable power.”
“We have established a strong, credible track record in the captive gas fired power market. Having built the strongest gas service and aftermarket capability in Nigeria through our sister company, Cummins Energy Solutions Nigeria. Cummins has a very strong track record and customer satisfaction rate”
In view of this fact, the Buhari lead administration is also prioritizing gas fired power generation, which is significantly cleaner and cheaper than diesel. For example, carbon dioxide emissions are up to 50% less than diesel and gas emits near zero particle emissions.
Further speaking on the Companies power generation capability, Deepak Said “Cummins gas engines are particularly suited to ‘island mode’ applications (off grid) as they can handle variable loads better than competitor generators. The engines are also some of the most efficient on the global market – offering significant savings compared to diesel generators.’’
Although The Federal Government of Nigeria is committed to increasing domestic natural gas utilization rather than importing expensive and polluting diesel, there is a need for domestic and foreign investors to take keen participation in the Nigerian power sector.
The government’s investment and support in the power and natural gas industry will have many positive spillover benefits such as employment opportunities and GDP growth.