Power: Minister Tells Nigerians to Prepare for Increased Electricity Tariff Again

The Minister of Power, Adebayo Adelabu has advised Nigerians to prepare for another electricity Tariff, giving reason to be that the nation’s economy can no longer sustain electricity subsidies.

 

As gathered, He told Nigerians to brace for cost-reflective tariffs.

‘’We have to understand that our economy cannot sustain subsidies indefinitely,”

Adelabu pointed out at a meeting with the Chairmen of Generating Companies of Nigeria (GenCos) in Abuja.

He, however, reaffirmed government’s interest in providing targeted subsidies for economically disadvantaged Nigerians.’’

He did not explain the category of Nigerians in the ‘’economically disadvantaged’’ category.

The Federal Government currently owes Generating Companies (Gencos) over N4 trillion in backlog subsidy payment.

In its February DisCos Performance report, the Nigerian Electricity Regulatory Commission (NERC) said the average actual tariff is N116.18kwh while consumers pay N88.2kwh.

The difference between the actual tariff and average collection, which is N27.97 kWh, was the cost of subsidy per kilowatt hour in February.

All NESI customers, except 15 per cent, which constitutes Band A, enjoy subsidy.

Adelabu’s spokesman Mr. Bolaji Tunji quoted the minister as telling the GenCos: Citizens must pay the appropriate price for the energy consumed. The Federal Government will continue to provide targeted subsidies for economically disadvantaged Nigerians.”

Adelabu also said the Federal Government was determined to offset a substantial part of the N4 trillion debt crippling power generation in the country through cash and financial instruments such as promissory notes.

He said this would be proposed at a meeting being planned between President Bola Ahmed Tinubu and GenCos’ leadership.

He said: “There is a need to pay a substantial amount of the debt in cash. At the minimum, let us pay a substantial amount, then ask for a debt instrument in promissory notes to pay the rest.

“We recognise the urgency of this matter. The government is committed to resolving this debt to stabilise the sector and prevent further crisis.”

 

 

Chairman of Mainstream Energy Solutions, Col. Sani Bello (retd.), who led his colleagues to the meeting had earlier sounded the alarm over the sector’s challenges, citing the N4 trillion debt as a critical threat to their operations.

Bello warned that liquidity challenges had left the GenCos unable to secure loans or maintain infrastructure.

He added that “without urgent intervention, the entire power ecosystem could collapse.”

Kola Adesina, chairman of Egbin Power and First Independent Power Limited, spoke in the same vein as Bello.

He said: “This is a national emergency. Everything hinges on power—industries, homes, hospitals. We cannot afford to let the sector fail.”

Association of Power Generating Companies (GenCos) Chief Executive Officer (CEO), Dr. Joy Ogaji, listed challenges undermining GenCos as including chronic payment defaults, erratic gas supply and foreign exchange volatility.

Ogaji noted that naira’s plunge from N157/$1 in 2013 to N1,600/$1 now had made nonsense of maintenance budgets and loan repayments.

“GenCos have borne unsustainable risks—from grid failures to unproductive taxes—while remaining patriotic,” she said.