The federal government must end electricity subsidy to prevent the power sector from collapsing, according to the Minister of Power, Adebayo Adelabu.
The minister made the remark on Sunday during a meeting with the management of Gencos in Abuja, the nation’s capital.
He said the federal government no longer have the capacity to pay subsidy to power firms because the economy lack the resources to continue with the multi-billion subsidy regime.
At least N4 trillion is being owed in subsidy to the power firms by the federal government, a situation that has created a problem of cash flow and threatened the sustainability of the sector.
The Gencos warned last week that if the situation persists the sector will collapse in no time.
They have also demanded the immediate payment of the N4 trillion legacy debt to avert the potential shutdown of the sector.
According to Adelabu, Nigerians must face the reality that the federal government no longer has the funds to subsidize the sector, urging electricity consumers to prepare for a cost-reflective regime where consumers must pay for what they consumed.
‘’We have to understand that our economy cannot sustain subsidies indefinitely,” Adelabu said on Sunday.
He also explained that a meeting is being planned between President Bola Ahmed Tinubu and Gencos on how to offset the N4 trillion subsidy debt.
They debt include the N2 trillion owed the power firm before last year and the N1.9 trillion 2024 subsidy debt.
The federal government said it’s committed to ensuring that the debt is cleared to forestall total power sector collapse.
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