By Chisaa Okoye (Business Reporter)

The Society of Energy Editors (SEE), has predicted that

the Nigerian energy sector will witness significant developments in the first quarter of 2025, driven by President Bola Tinubu’s proposed N49.7 trillion budget for the year. The Society, however, asserted that strong political will is critical in achieving significant growth in the energy sector and the economy as a whole.

The 2025 Budget of Restoration, titled “Securing Peace, Rebuilding Prosperity”, is anchored on an increase in base crude oil production to 2.06 million barrels per day, expected to drive down inflation from 34.6% to 15% in 2025.

Tinubu had vowed to bring down headline inflation from 34.6 percent to 15 percent, an ambitious target given the skyrocketing food inflation in Nigeria.

According to the National Bureau of Statistics (NBS), Nigeria’s food inflation, which is a major contributor to the overall inflation, peaked at 39.93 percent in November, 2024.

Experts opine that to achieve a reduction in inflation, especially food inflation, the authorities  must tackle insecurity, flooding, high cost of public transportation, inefficient power supply, as well as reduce the high cost of imported inputs in 2025.

In its recently released “Nigeria Energy Outlook Q1 2025”, the SEE listed key areas to watch in the energy sector in the first quarter of the year to include oil exploration and production; domestic crude refining; gas production and liquefied natural gas, LNG, export; power generation and transmission as well as labour relations.

“The government’s target to increase crude oil production is ambitious, but its feasibility hinges on addressing security challenges, particularly in the Niger Delta region.

“Nigeria plans to hold a fresh oil licensing round in 2025 focused primarily on handing out blocks that remained undeveloped, as the country battles to raise crude reserves and production,” the body said in its energy outlook.

The SEE however, noted  that “the Federal Government of Nigeria would have to show the necessary political will and apply a lot of push for this fresh oil licensing round to happen during the year as planned.”

The Society further noted that the commencement of petroleum refining at the Dangote Refinery is expected to reduce fuel imports and ease the burden of petroleum subsidies. It, however, added that the steady supply of crude oil feedstock from the NNPC Ltd to the Dangote Refinery will be crucial in determining the refinery’s impact on the economy in 2025.

Nigeria spent N9.176 trillion on the importation of the Premium Motor Spirit, PMS, also known as petrol, in nine months, from January to September 2024, rising by 60.87 percent, compared with N5.704 trillion worth of the commodity imported in the same period in 2023.

On gas production and LNG exports, the SEE projected that Nigeria’s gas sector will grow during the first quarter, driven by the government’s “Decade of Gas” initiative and the country’s ambitions to increase its gas reserves to 210 trillion cubic feet, Tcf, in 2025 and 220 Tcf by 2030.

“Gas production and supply will also increase in response to the Federal Government initiative on gas for automobiles and the need to meet the current shortfalls being experienced by power generating stations and industries,” it also projected.

The body also noted that gas export through the Nigeria LNG Limited will be steady during the first quarter.

In the area of power generation and transmission, the Society of Energy Editors, said efforts to expand power generation and improve transmission infrastructure will continue, with a focus on increasing the share of renewable energy sources in the energy mix.

It stated that power transmission and distribution infrastructure remained very weak with the national grid recording 12 incidents of collapse in 2024. Adding that 2025 would witness a repeat owing to poor mitigation measures aimed at tackling inherent weaknesses.

On labour relations, the Society stated that the government would need to address labour concerns in the downstream and upstream petroleum sectors, as well as in the electricity sector, to maintain stability and avoid disruptions.

Listing challenges and opportunities, the Society stated, in the Nigeria Energy Outlook Q1 2025, that the government’s expectations for reducing inflation and improving the exchange rate may be challenging to achieve, given the current market realities.

Also, the Society said the development of the Niger Delta region, through the activities of the Niger Delta Development Commission, would be crucial in addressing the root causes of insecurity and instability in the region.

The Energy Outlook further stated: “The solid minerals sector offers significant opportunities for revenue growth and job creation, but the government will need to address the challenges of artisanal mining and ensure that the sector is developed in a sustainable and responsible manner.

“Overall, the first quarter of 2025 will be critical in setting the tone for Nigeria’s energy sector in the year ahead. The government’s policies and initiatives will need to be carefully implemented to address the challenges facing the sector and to unlock its full potential.”