From Isaac Anumihe, Abuja
Nigerian Electricity Regulatory Commission (NERC), has said that the Federal Government incurred a subsidy obligation of N204.59 billion.
This was contained in the Commission’s 2023 third quarter report.
According to the document, the subsidy expenses were incurred due to the lack of cost-reflective tariffs across all electricity distribution companies (DisCos).
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the government incurred a subsidy obligation of N204.59 billion in 2023/Q3 (average of N68.20 billion per month), which is an increase of N69.37 billion (+51.30 per cent) compared to the 135.23 billion (average of N45.08 billion per month) incurred in 2023/Q2; this increase is largely attributable to the government’s policy to harmonise change rates,” the report said.
The Bola Ahmed Tinubu administration had suspended the payment of electricity tariffs and promised to pay N900 billion subsidy in the last quarter of 2023.
Minister of Power, Chief Adebayo Adelabu, said this in a meeting with the Nigeria Union of Electricity Employees (NUEE), in Abuja.
He queried the essence of privatising the assets if the government would continue to fund their operations
Adelabu revealed that the government would issue a policy statement very soon towards the takeover of the distribution side of the power supply value chain.
The minister did not see the reason for government to subsidise the operations of the distribution companies (DisCos) after they were privatised.
Meanwhile, the Co-ordinating Minister for the Economy, Wale Edun, has said at a Ministerial Retreat, organised by the Ministry of Power, that the poor power situation was unacceptable to the government.
For him, the privatisation of the power sector has underperformed and it’s very disappointing, adding that the government can only rely on renewable energy for greener and cleaner power and to grow the economy.
“Power is one of the Bola Ahmed Tinubu’s priority areas to drive a rapid, sustained economic growth.
“Power is clearly at the heart of his programme. We cannot have industrialisation and growth in manufacturing without electricity.
Forty per cent of the Nigerian population do not have access to electricity and clearly to Mr President, that is unacceptable.
Ten years ago, there was a privatisation exercise, but it has underwhelmed and underperformed and the result has been disappointing. So, it is important that stakeholders are part of the conversations and solutions.
“In addition to all other options that we have for pricing electricity, we now have an array of options with the renewable energy. It cannot be that we have the choice of going all green, all we want to see is a solution of providing power and growing the economy rapidly.
“So, that is the mandate for all stakeholders. They should protect the environment, but more importantly they must provide the basis for growing Nigeria’s economy” he said.