Nigeria’s Minister of Power, Adebayo Adelabu, has stated that the country’s economy can no longer sustain electricity subsidies. He advised Nigerians to prepare for the introduction of tariffs that reflect the true costs of electricity. Adelabu emphasized that while the government is committed to supporting economically disadvantaged Nigerians, the current subsidy regime is unsustainable.
*Debt To Generating Companies*
The Federal Government currently owes over N4 trillion to Generating Companies (Gencos) for overdue subsidy payments. According to the Nigerian Electricity Regulatory Commission (NERC), the average real tariff stands at N116.18 per kilowatt-hour, while consumers are charged N88.2 per kilowatt-hour, resulting in a subsidy cost of N27.97 per kilowatt-hour.
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*Targeted Subsidies*
Adelabu assured that the government would continue to provide targeted subsidies to support economically disadvantaged Nigerians. He emphasized the need for citizens to pay the appropriate price for energy consumed, while the government addresses the significant debt hindering power generation in the country.
*Debt Resolution*
The Minister stated that the government is committed to resolving the N4 trillion debt using a combination of cash and financial tools like promissory notes. He emphasized the urgency of this matter, highlighting the need to stabilize the sector and prevent further crisis.
The introduction of tariffs that reflect the true costs of electricity is expected to have a significant impact on the power sector, and the government’s commitment to supporting vulnerable Nigerians will be crucial in mitigating the effects of this policy change.
