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Infractions – FG threatens to disconnect Gencos from power grid

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Baffled by the incessant collapse of the national grid, the Federal Government, through the Nigerian Electricity Regulatory Commission, has issued an order mandating all electricity generation companies connected to the grid to implement Free Governor Control across their generating units, warning that non-compliance would attract heavy penalties, including disconnection from the grid.

The order, referenced NERC/2025/094 and signed on August 26, 2025, by the commission’s Vice-Chairman, Musiliu Oseni, and the Commissioner, Legal, Licensing & Compliance, Dafe Akpeneye, will take effect on September 1, 2025.

In power generation, a governor is a control system that regulates the speed or output of a turbine or generator. Its primary function is to maintain a stable speed or frequency.

Free Governor Control is a mode of operation in power generation where the governor of a turbine or generator is allowed to freely adjust the output in response to changes in grid frequency. This control mode enables the generator to contribute to grid stability by automatically increasing or decreasing output to match demand and maintain frequency within acceptable limits.

It was ordered that any GenCo that fails to comply with the integration and activation of FGC on all generating units by November 30, 2025, shall be liable to a penalty of a prorated 10 per cent of the invoice associated with the defaulting generating unit, and any generating unit that records 90 consecutive days of FGC non-compliance shall be disconnected from the grid.

The commission said the measure was necessary to stem repeated system disturbances and enforce strict compliance with the Grid Code. According to the commission, the order seeks to establish a structured framework for enhancing power generation reliability and stability of Nigeria’s power grid by ensuring strict compliance with operational frequency limits, implementing transparent monitoring mechanisms, and penalties for violations of the Grid Code.

NERC said it is mandated by section 34(1)(e) of the Electricity Act 2023 to ensure the safety, security, reliability, and quality of service in the production and delivery of electricity to consumers, while section 34(2)(b) of the Act empowers it to establish or approve operating codes and standards to ensure safety, security, reliability, and quality in the production and delivery of electricity services in the NESI.

The regulator reminded operators that section 12.6.2 of the Grid Code requires every generating unit to be fitted with a fast-acting governor system capable of regulating turbine speed and adjusting output when frequency deviates.

“Section 12.6.2 of the Grid Code for the Nigerian Electricity Transmission System requires all generating units to be fitted with fast-acting FGC that is capable of regulating turbine speed and adjusting power output based on frequency deviation exigencies, i.e., primary control.

“The FGC shall be sufficiently damped for both isolated and interconnected operation modes. The FGC and any other superimposed control loop (load control, gas turbine temperature limiting control, etc.) shall contribute to the primary control to maintain the unit within the generating unit’s capability limits.

“Furthermore, the primary control characteristics shall be maintained under all operational conditions. Where a generating unit becomes isolated from the system but is still available to supply demand, the generating unit must be able to provide primary control to maintain frequency and voltage,” the order stated.

The regulator recalled that the national grid experienced eight incidents of grid disturbances in 2024, which resulted in five full system failures and three partial system failures, blaming the GenCos.

“The incident reports filed by the Transmission Company of Nigeria Plc identified non-compliance with the provisions of the Grid Code by some generation companies as contributory factors. The performance review of the operations of grid-connected GenCos in 2024 revealed that there was significant failure on the activation of FGC,” the NERC noted.

The order, it was said, is to ensure the mandatory deployment and activation of FGC in all generating units to enhance the reliability of power generation and stability of grid operations and to ensure GenCos’ compliance with sections 12.6.2 and 15.8.3 of the Grid Code for the Nigerian Electricity Transmission System on FGC.

It is also to promote strict compliance with FGC requirements to minimise the risk of system disturbances and engender stable grid operations while establishing penalties for non-compliance. The commission ordered that all grid-connected GenCos shall install a fast-acting FGC in all generating units, and the FGC shall be operable at all times by 30 November 2025.

“GenCos shall at all times activate and operate the FGC in real-time without any time delays. GenCos are mandated to procure and supply a Grade Level 5 metering system with IoT-based monitoring capabilities for each generating unit and communicate readiness for installation to the NISO by 31 October 2025. The meters are required to have a minimum capability of measuring active power, reactive power, power factor, generator terminal voltage, and frequency.

“The Nigerian Independent System Operator shall install and integrate all IoT metering systems provided by the GenCos within 20 days of receiving notification of readiness for meter installation from each GenCo. NISO shall actively monitor and enforce strict compliance with the operationalisation of FGC mode in generating units. This shall be achieved through real-time data obtained from the Grade Level 5 IoT meters, ensuring accurate tracking, validation, and assessment of the performance of generating units.

“NISO shall maintain real-time monitoring and record hourly compliance reports on the operation of FGC across all generating units. NISO shall compile and file monthly reports with the commission on the status of compliance with the provisions of the Grid Code on FGC to facilitate regulatory oversight,” the order read partly.

On the consequences for non-compliance, the regulator declared, “Any GenCo that fails to comply with the provisions of sections 12.6.2 and 15.8.3 of the Grid Code on the integration and activation of FGC on all generating units by 30 November 2025 shall be liable to a penalty of a prorated 10 per cent of the invoice associated with the defaulting generating unit for the duration during which it was not operated with its FGC activated, that is, FGC non-compliant.

“Where a generating unit records 90 consecutive days of FGC non-compliance, the affected generating unit shall be disconnected from the grid. Reconnection shall only occur after NISO has certified the unit as fully compliant with the requirements of the Grid Code.

“NISO shall be responsible for determining non-compliance by defaulting GenCos and implementing penalties on the invoice and settlement of the affected GenCo. NISO shall handle the billing, payment processing, and dispute resolution for this penalty in accordance with Rules 28 and 29 of the Market Rules. NISO shall invoice defaulting GenCos the specified penalty amount as part of the monthly market settlement. The proceeds of the penalty shall be remitted to the Ancillary Service Account,” the order read.

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Fuel scarcity looms as NUPENG begins nationwide strike Monday

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The Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has announced that its members will embark on a nationwide strike starting Monday, September 8, 2025, over alleged anti-union labour practices linked to the deployment of newly imported Compressed Natural Gas (CNG) trucks by Dangote Refinery.

In a statement signed by its National President, Prince Williams Akporeha, and General Secretary, Afolabi Olawale, the union said the development violates workers’ rights and undermines existing trade unions in the oil and gas sector.

NUPENG recalled that on June 14, 2025, Alhaji Aliko Dangote announced plans to import 4,000 CNG trucks—later raised to 10,000—for nationwide distribution of petroleum and diesel products. While initially seen as a welcome investment, the move sparked concerns from stakeholders, including the National Association of Road Transport Owners (NARTO).

A meeting held on June 23, 2025, between NUPENG, NARTO, and Dangote’s representative, Alhaji Sayyu Dantata, reportedly revealed that the trucks would operate under a new arrangement that excluded existing unions.

The union further alleged that recruitment of drivers for the trucks began on August 29, 2025, with applicants required to sign undertakings not to join unions in the oil and gas industry.

“The recruitment being carried out on the condition of not joining existing unions is a matter of serious concern to us,” NUPENG said. “This violates Nigeria’s Constitution, labour laws, and international conventions on freedom of association.”

The union cited Section 40 of the Nigerian Constitution, which guarantees freedom of association, Section 9(6) of the Labour Act, which prohibits penalising workers over union membership, and Nigeria’s ratification of ILO Convention No. 87, which is binding under Section 254C(2) of the Constitution.

NUPENG also urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to exercise its powers under Section 32 of the Petroleum Industry Act (PIA) to prevent restrictive practices in the petroleum sector.

Having failed to secure a resolution after several engagements with government agencies and stakeholders, NUPENG said it had no choice but to proceed with the strike.

“The strike is not to create hardship but to protect workers’ rights and ensure a fair and competitive downstream petroleum industry,” the statement read.

The union appealed for public understanding and called on other labour groups, including the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC), to stand in solidarity. It also revealed that members of its Petroleum Tanker Drivers Branch had been advised to seek alternative employment or skills training if the dispute persisted.

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SEC creates insurance recapitalisation desk, pledges 14-day approval

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The Securities and Exchange Commission has created a dedicated desk to fast-track approvals for insurance sector recapitalisation, pledging to deliver decisions within 14 days of complete submissions.

This was disclosed at the end of the 19th Insurers’ Committee meeting by the Head of the Communication and Stakeholders Management Sub-Committee of the Insurers’ Committee, Ebelechukwu Nwachukwu, in Lagos.

President Bola Tinubu recently signed into law the Nigerian Insurance Industry Reform Act 2025, and it included a wide range of reforms, including a substantial increase in minimum capital requirements for insurance companies.

Nwachukwu disclosed that the Director-General of the SEC, Dr Emomotimi Agama, made a presentation to the meeting, noting that the concessions being made to the insurance industry were part of the collaboration between the capital market and insurance regulators aimed at transforming the sector.

“There cannot be a better ally to the capital market than the insurance industry,” she said. “He also acknowledged that this is the first time that the collaboration between NAICOM and SEC is happening, and it’s happening in a very strong manner. And he expressed his belief in the industry and his actions to support the recapitalisation process.

“The key thing is, they’ve set up a dedicated desk for insurance companies, and all approvals that the SEC has committed to us are to be granted within 14 days, so long as we submit our applications to raise capital with all the required documents on time,” she added.

According to Nwachukwu, the SEC has given about nine concessions and reduced fees for the insurance sector’s recapitalisation process. Agama was said to have stressed that Nigerian investors were actively seeking new outlets, citing over N3tn raised recently for the banking sector, and urged insurers to position themselves to attract similar inflows.

The Commissioner for Insurance, Olusegun Omosehin, was said to have reminded the industry that recapitalisation under the newly enacted NIIRA Act should not be seen as a mere fund-raising exercise but as an opportunity to restructure, strengthen governance, and rebuild public confidence in the industry.

The regulator has already released draft guidelines on minimum capital requirements, InsurTech, and Takaful operations for industry input. Final guidelines are expected soon, alongside the establishment of a Policyholders’ Protection Fund, which will be managed by an independent audit firm.

Nwachukwu said, “NAICOM has released a draft of minimum capital requirement guidelines, which they require the insurance companies to comment on, and the comments have been sent. These comments will be considered, and the final guidelines will be released by NAICOM as soon as possible. They’ve also issued guidelines on insurtech and issued guidelines on Takaful, basically to just guide the industry in these processes.

“NAICOM also encouraged organisations to begin sending the recapitalisation plans. So, they don’t only want to see the plans of how we plan to recapitalise, but they also want to see how we plan to utilise the funds that we generate before they will approve it.”

She added that NAICOM has pledged to continue to focus on ethical practices and fairness to consumers. The NAICOM boss commended the industry on the major claims paid.

“You know, the industry has had about four massive claims, and all these claims have been paid. He said the payment of this claim has shown our capacity,” she averred. With more than 40 million small and medium enterprises underserved, and health insurance still largely ceded to HMOs, both regulators urged insurers to expand into growth areas while preparing their recapitalisation plans.

“This is not just about raising capital. It is about transforming the insurance industry into a trusted pillar of Nigeria’s financial system,” Nwachukwu emphasised.

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Dangote CNG trucks – Tanker drivers to stop fuel loading Monday

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Tanker drivers under the Nigeria Union of Petroleum and Natural Gas Workers have threatened to stop fuel loading over the seeming cold war between them and the management of the Dangote refinery.

The crisis is arising from the plan by the Dangote refinery to import 4,000 compressed natural gas-powered trucks for the direct distribution of fuel to retailers.

Though the scheme scheduled to commence on August 15 was delayed by logistics challenges in China, the refinery told our correspondent that it would flag it off when a good number of the trucks are received.

But NUPENG, in a statement signed by its President, Williams Akporeha, and the General Secretary, Afolabi Olawale, on Friday, accused the management of the Dangote refinery of alleged anti-labour practices inimical to the survival and means of livelihoods of its members under its Petroleum and Tanker Drivers Branch.

The union lamented that the founder of the refinery, Aliko Dangote, had said that new drivers would be recruited for the imported trucks, and none of them would be allowed to join any union.

The union described the position taken by the management of Dangote refinery as an affront to the right of association, guaranteed under the 1999 Constitution, and a breach of relevant international labour laws to which Nigeria is a signatory.

NUPENG recalled several meetings it initiated, jointly with the leadership of the Nigerian Association of Road Transport Owners, to prevail on Aliko Dangote to rescind his stance on not allowing its drivers to join trade unions. However, the union expressed regret that its appeals were allegedly ignored.

“Arising from the unfortunate outcome of the meeting, the leadership of the Union have made several efforts to get relevant institutions of the country to make Alhaji Aliko Dangote and his cousin, Alhaji Sayyu Ali Dantata, follow the line of global best practices and decency, but all to no avail.

“To our utmost shock, Alhaji Sayyu Aliu Dantata’s MRS commenced the recruitment of drivers for the imported CNG trucks on Friday, 29th August 2025. The drivers being recruited are being forced to sign an undertaking not to belong to any existing union in the oil and gas industry. NUPENG is seriously concerned and disturbed with the unconscionable business practices of Alhaji Sayyu Aliu Dantata and Alhaji Aliko Dangote, who are scared of allowing unions to exist in their business outfits”, the statement partly read.

NUPENG said it would not stand idly by and watch while the livelihoods of thousands of workers, including tanker drivers, are destroyed.

“NUPENG stood in solidarity with Dangote Refinery during its construction and commissioning. We did so in good faith, in expectation it would create jobs, strengthen local capacity, and benefit the Nigerian people, under a conducive atmosphere for unions to thrive.

“Unfortunately, Alhaji Aliko Dangote has chosen to betray that trust by scheming to monopolise distribution, crush competition, enslave the sector, and raise prices, which would ultimately result in an attack on the living standards of the masses of ordinary Nigerians. This is not philanthropy; it is economic sabotage,” it was stated.

While appealing to relevant oil industry regulatory agencies to wade into the unfolding crisis, the union threatened it would call on its members to down tools and shun loading of petroleum products, effective from Monday, September 8.

“Meanwhile, since Alh Aliko Dangote and his cousin have resolved to replace all petroleum tanker drivers in Nigeria, and there is no one or institution that can stop him, the members of the Petroleum Tanker Drivers Branch of NUPENG will, from Monday, 8th September 2025, start looking for alternative employment/skills and sources of livelihoods.

“We plead with the general public to bear any inconveniences our struggle against this tyranny and indecency may cause; it is a struggle that must be waged! We call on all other industrial unions and the central labour organisations, the NLC, TUC and global union federations, to get ready to stand in solidarity with peaceful mass actions and industrial actions in defending labour rights”, the union said.

Dangote spokesperson, Anthony Chiejina, has yet to reply to messages sent to him by our correspondent.

The dispute between tanker drivers and the Dangote Refinery comes at a critical time for Nigeria’s downstream oil sector, as the country seeks to stabilise fuel distribution and cut reliance on imported refined products.

The $20bn Dangote Refinery, inaugurated in May 2023, has been hailed as a game changer for Nigeria’s energy security, with a production capacity of 650,000 barrels per day.

However, its new plan to import and operate 4,000 compressed natural gas-powered trucks has sparked labour concerns over potential job losses for members of NUPENG.

NUPENG’s threat to halt fuel loading highlights fears of a wider labour confrontation that could disrupt petroleum product supply nationwide, potentially leading to fuel scarcity if not resolved.

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