The Minister of Power, Adebayo Adelabu says the federal government could no longer afford paying subsidy on electricity.
The minister made this known on Wednesday during a press conference in Abuja, the nation’s capital, saying the federal government must chose on whether to continue to pay subsidy or allow cost reflective tariff to take effect.
The minister’s remark would likely spark an outbursts from Nigerians who are currently struggling to cope with the government removal of subsidy on petrol which analysts blamed on inflation currently ravaging the country, as the cost of food and other households commodities has spiralled beyond control.
Removing subsidy on electricity will further made the situation worse due to the effect the cost of energy would have on the companies producing essential commodities.
According to Adelabu, whereas N450 billion was allocated in the 2024 Budget for subsidy payment, an estimated N2.9 trillion is actually required to offset electricity subsidy for the year, adding that N1.6 trillion had earlier been projected.
The situation has left a very huge difference which the federal government could not afford at the moment, adding that
country is currently indebted to the tune of N1.3 trillion to generating companies (GenCos) as well as $1.3 billion legacy debts.
With this development, Adelabu said the country must decide whether electricity should be regarded as a social service, or allow Nigerians to pay fully their electricity bill without subsidy from the government.
He said: “What was made provision for in the budget for subsidy was N450 billion. And we require N2.9 trillion for subsidy. So can we afford it? Let’s be realistic.
Can we afford it? N450 billion is less than 20 per cent of the almost N3 trillion that is required for subsidy if we must continue at this time.
“A national discourse on the nation’s perspective to electricity supply, commercial product or social service. There must be an agreement across divides on how we define electricity. Depending on the outcome of the above, either implementation of a cost reflective tariff or a cashed backed federal government guaranteed subsidy funding regime to inject liquidity into the sector.”
Instructively, the minister’s remarks is coming on the crest of bitter complaints by Nigerians that power is not stable in the country, despite huge electricity bill being paid by consumers.
Other Nigerians have also complained of the monthly estimated billings by power distribution companies, DISCOS, which they say has not translated to stable power to electricity users.
The national grid has been on constant collapse, at least six times in the last six months, a situation that has further worsened the electricity problems in the country.
In response, the Nigerian Electricity Regulatory Commission, NERC recently sanctioned some DISCOS following complains by many consumers over the estimated billings.
Meanwhile, the electricity providers have blamed the erratic power problems on the irregular gas supply to them, the companies also said the dilapidated infrastructure in the sector has hindered them from supplying enough electricity to consumers.
