By Adewale Sanyaolu
Nigeria celebrated its 65 years of independence on October 1 literally in darkness, especially in rural communities.
Stakeholders described the development as very shameful, especially for a nation immensely blessed with hydrocarbon resources needed to power the country.
According to them, Nigeria, having discovered crude oil as far back as 1958 in Oloibiri, should have long become an industrialised space.
But unfortunately, the direct opposite has played out as persistent energy poverty has stalled economic growth and crippled industrialisation efforts.
Today, Nigerians have frustratingly accepted the power insufficiency nightmare as the rule, rather than the exception.
Concerns are mounting that despite the importance of the energy industry’s contribution to economic growth, corruption and dirty politics have been allowed to cripple the sector while influential Nigerians feed fat from rot.
According to experts, one of the key issues creating a setback for the sector is regulatory uncertainty which is a fall out of weak regulatory capacity and bureaucratic inefficiencies that hinder effective policy implementation and enforcement.
For several decades, the oil industry operated without a codified set of laws guiding its operations, a development that led to loss of investment and investor confidence.
As of 2016, the Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed that the country has recorded losses to the tune of $200 billion for failing to pass an enabling law for the petroleum industry.
According to NEITI, some of the losses were projected investments due to regulatory uncertainty.
The body added that clear, unambiguous rules, predictable policy-making and efficient regulations had been lacking in Nigeria’s petroleum sector since the process of enacting a law for the sector commenced.
A NEITI 2013 audit of the oil and gas sector showed that $10.4 billion and N378.7 billion (i.e., N3.2 trillion at the current exchange rate) were lost.
According to the agency, the losses were attributable to under-remittance, underpayments, inefficiencies, theft, or absence of a clear fiscal regime in Nigeria’s oil and gas sector.
NEITI stated that the losses had also been huge in economic terms on Nigeria’s foreign reserves and the value of the naira due to imports of over $26.4 billion worth of refined petroleum products.
NEITI worried that Nigeria’s oil and gas sector had continued deteriorating due to insufficient laws governing the industry.
However, four years down the line since the Petroleum Industry Act (PIA) became a law, some of the issues plaguing the sector pre-PIA still suffice, especially as it relates to regulatory failure.
Regulatory gaps further undermine the Act. It lags behind global trends such as digitalisation of operations, the transition to cleaner energy, and alignment with international climate goals.
The investment climate has also worsened. Poor enforcement of contracts, under-declaration of crude, and frequent disputes between communities, oil companies and regulators discourage both foreign and local investors. Growth and modernisation targets are slipping away.
In a recent interview with Daily Sun, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Mr. Billy Gills-Harry, pointed out some lapses in regulatory oversight in the face of the recent face-off between Dangote Refinery and some key industry players.
The PETROAN President pointed out that section 212 of the PIA prevents an investor from playing across the entire value chain of the downstream sector, saying that such was already happening and calls for a need for the regulator to step in.
In his comments, Partner at Bloomfield Law Practice, Mr. Ayodele Oni, said the PIA’s promises of stronger regulation, environmental accountability, and host community benefits have been slow to materialise. Likewise, electricity reforms have not been matched by effective monitoring or tariff discipline. “I believe Nigeria’s next decade must focus less on drafting new reforms and more on enforcing the ones already in place,” he added.
Etulan Adu, an oil and gas analyst, acknowledged that the PIA had provided clearer fiscal policy direction, especially in upstream investments and the development of offshore blocks by international oil companies (IOCs).
“The PIA, with government support, creates an avenue for indigenous oil company participation and local content development,” he said. “With it, the ease of doing business and permit approvals, bidding for oil blocks have been streamlined. It also led to the unbundling of NNPC, which is indeed a step forward in ensuring business performance as a corporate entity.”
Adu added that the law has helped position Nigeria as a serious and globally competitive investment destination. “It has helped to show that Nigeria is serious about being globally competitive and an attractive investment destination. The fight with oil theft is still eminent,” he noted.
Despite these gains, Adu stressed the urgent need for more effective implementation to ensure the PIA benefits the Nigerian people. He pointed out that progress in the downstream sector has been limited compared to the upstream.
“The PIA made provision for this, but the implementation, impact, and improvement haven’t been significant compared to the upstream sector. The removal of subsidy is a plus for investors, but government involvement in market pricing and the opaque nature of agency administration and regulations is hindering progress,” he said.
Kelvin Emmanuel, an energy expert, expressed similar concerns about enforcement and compliance. He said the provisions of the PIA have not been fully enforced by regulators, nor has there been full compliance by operators. He cited slow regulatory oversight of the Hydrocarbon Community Development Trust (HCDT) as an example of the law’s incomplete implementation.
“While you can say that the Petroleum Industry Act has separated the state-owned enterprise from its regulators and has modernised the fiscal terms that govern the commercial framework for contracts in the upstream sector, there has not been full enforcement of regulators or compliance from operators on the provisions of the PIA,” Emmanuel said.
He highlighted the slow rollout of domestic crude supply obligations under section 109 of the PIA, noting that many operators cite stabilisation clauses related to pre-export facilities to excuse non-compliance.
Emmanuel called for clarifications and amendments to the Act, especially to differentiate domestic crude intervention stocks from Nigeria’s OPEC quota.
“There is a need to separate the domestic crude intervention (DCI) stock from the OPEC quota and classify DCI into a strategic petroleum reserve, as a tool to guarantee Nigeria’s energy security,” he added.
On electricity metering, the Nigerian Electricity Regulatory Commission (NERC) factsheet on the Metering Status of Distribution Companies released last week showed that 63,180 customers were metered in May, while 84,897 were metered in June.
This brought the total number of metered customers nationwide to 6,422,933 as of June 2025, representing a slight rise in the national metering rate from 53.78 per cent in May to 54.33 per cent in June. The NERC data showed that the country’s total active electricity customers rose marginally from 11,784,842 in May to 11,821,194 in June.
By performance, Ikeja DisCo recorded the highest metering rate at 84.65 per cent, followed by Eko at 83.33 per cent and Abuja at 73.06 per cent. At the bottom, Yola had the lowest metering rate at 28.55 per cent, with Jos and Kaduna standing at 29.51 per cent and 33.46 per cent, respectively.
The report also highlighted Aba DisCo as the most improved, with its metering rate rising from 37.88 per cent in May to 45.17 per cent in June, after installing 12,376 new meters. Benin DisCo also crossed into the 50 per cent mark, increasing from 49.95 per cent to 50.33 per cent within the same period, according to NERC’s figures.
However, despite the progress, seven of the 12 DisCos remain below the 50 per cent metering rate, leaving millions of customers unmetered and subjected to estimated billing.
In response to the widespread use of estimated billing, often criticised by consumers as arbitrary, the commission maintained its policy of setting monthly energy caps for all feeders.
These caps specify the maximum amount of energy that may be billed to an unmetered customer based on the feeder’s total energy consumption and the usage profile of metered customers. However, there were reports that many of the DisCos still overbilled their customers, attracting sanctions from the regulator.
In the commission’s various quarterly reports, metering has remained one of the dominant causes of customer dissatisfaction, along with billing issues and service interruptions.
Oni pointed out that the 2013 privatisation of generation and distribution companies was meant to deliver efficiency and attract investment.
More than a decade later, he worried that the results have been mixed, saying that while some operators have improved their networks, the overall system still struggles with weak infrastructure, poor metering, and liquidity shortfalls.
“The national grid continues to experience repeated breakdowns, and much of the country still depends on self-generation through diesel and petrol generators. I see this as a sign that while ownership changed, enforcement and investment discipline did not match the scale of reform required.
That said, one of the more hopeful developments is the passing of the Electricity Act and also the rise of decentralised and state-led electricity markets. States can now regulate their own power generation and distribution, and the growing number of solar and mini-grid projects across rural and urban communities shows that localised solutions may finally begin to close Nigeria’s access gap.
However, the main weakness remains implementation. The PIA’s promises of stronger regulation, environmental accountability, and host community benefits have been slow to materialise. Likewise, electricity reforms have not been matched by effective monitoring or tariff discipline. I believe Nigeria’s next decade must focus less on drafting new reforms and more on enforcing the ones already in place.”
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