Adelabu Canvasses an End to Subsidy on Electricity, Says Nigeria’s Power Tariff Is Lowest in ECOWAS
Power Minister, Dr. Adebayo Adelabu, has canvassed for the total removal of existing subsidies from electricity tariffs in the country.
He attributed the present power crisis to several issues, including unpaid subsidies to power plants.
He made the call during his inspection visit to the 750 megawatts Olorunsogo power plant, near Abeokuta, and 500 megawatts Omotosho Power Plant in Ondo state.
The Minister called for the migration to a full cost-reflective tariff if the federal government can no longer pay the subsidy debt to power plants.
According to him, Nigeria has the lowest electricity tariff in ECOWAS.
He explained that the unpaid subsidy by the federal government has led to a huge debt, making it difficult for generating plants to pay the supplier of gas for their operation.
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At the moment, he said major power plants, including those operated by the Niger Delta power holding company, are operating below 25 percent of their installed capacity.
He said the meeting with the relevant ministers would continue on Thursday, noting that they were to discuss ways to help the power sector through the injection of the required liquidity and payment of parts of the outstanding debts owed to the generating companies.
Going forward, the power minister said Nigeria needed to have a conversation on whether to pay for the real price of power, which he said was no longer cheap.
According to him, throughout West Africa, Nigeria still pays the lowest tariff for power supply, arguing that Ghana, Ivory Coast, Niger, and the like pay almost more than double Nigeria’s electricity tariff.
So, if the government is insisting on continuing with the subsidy, then it has to be funded so that there’s no debt piling up for the generating companies. That’s the only way out of the current power situation, he maintained.
However, Adelabu assured Nigerians of an improvement in nationwide power supply in the coming weeks, saying the drop in supply experienced in the past three weeks was a temporary situation and resulted from shortages in gas supply to the power Gencos.
He also promised that the government would pay down a major part of the debts owed to the Gencos in the next couple of days, adding, And I believe that gas supply will improve to the power generating companies and power supply to the entire nation will also improve.
