FG Spent N700bn On Electricity Subsidy In 2023 — Adelabu
FG only invested N700 billion in electricity subsidies according to Minister of Authority
According to Adebayo Adelabu, the minister of power, the federal government subsidized electricity with nearly N700 billion in 2023.
He declared, “As it is today, the Federal Government still subsidises electricity because the current tariff DISCOs are allowed to charge is not cost-reflective. This is why the Federal Government spent close to N700 billion in 2023 to subsidise electricity. If tariffs are left at this current rate, it is projected that the government will spend about N1.7 trillion to subsidise electricity. The FG cannot afford that.”
Mr. Adelabu made these remarks during his official working visit to the Ibadan Electricity Distribution Company (IBEDC) Head Office in Ibadan as part of his nationwide working visit, beginning in Oyo State, on Monday.
“There must be an upward review of the electricity tariff in order to reduce the amount of subsidy required. If we make the tariff 100 per cent cost-reflective, the burden will be too much on our people. We don't want that. To reduce the burden on our people, it is only a fraction of the tariff review that will be reflected.”
He stated that lobbying and sensitization would take place prior to the tariff review in order to support the upward review. He also mentioned that the tariff review would be “graduated,” which would mean that those with higher incomes would receive a higher review, while those who are less fortunate would receive a lower review. Adelabu added that in order for the review to happen, “there must be an improved power supply.”
He claims that the purpose of the visit is to examine and appraise the nation's electrical infrastructure. “It also includes visiting the institution that carries the primary responsibility of electricity distribution in the state,” he stated.
The Ayede 330/132KV transmission substation in Ibadan was one of the state's principal transmission facilities that the minister had previously visited.
In addition, he declared that he would install a few solar-powered mini-grids in the state's local government areas, overseen by the Rural Electrification Agency (REA).
“I am happy to be here for the first time to meet with the management of IBEDC. I am here to discuss the state of performance in the power sector. Effort to improve its performance is a collective one.”
He pointed out that the government and other stakeholders in the private sector needed to work together because the performance of the electricity sector was unsatisfactory.
“IBEDC is the largest of the DISCOs in terms of coverage. The consumers' expectations of us are very high, and we cannot afford to disappoint them.
“President Bola Tinubu, during his election campaign, promised a stable power supply to the people. In his priority areas, power comes first.
“There is nothing we can achieve in terms of economic growth and national development without a reliable electricity supply.”
After thanking the minister for his first visit to the company, Kingsley Achife, the Chief Executive Officer of IBEDC, requested a revision to the electricity tariff in his response. He pointed out that the rising price of gas made the tariff unfeasible.
During the meeting, Adelabu criticized the nation's DISCOS for having different metering gaps.
“People are tired of estimated billing. Metering is key. Before the end of this year, we are looking at the possibility of cancelling estimated billing anywhere in the country. How do we achieve that? There are a lot of meter-acquisition initiatives by the federal government across the country.
“However, DISCOs must accelerate the pace of metering customers so that there will be transparency in the bills you give them.”
Adelabu added that with his position as the chairman of the newly established Presidential Metering Initiative (PMI), the Federal Government would work with DISCOs to close the metering gap.
"As it is today, we have a close to 8 million-meter gap in Nigeria. What this initiative aims to achieve is to close this metering gap completely within a period of three to five years. This means an average of two million metres will be acquired nationwide yearly. Achieving this laudable target is not an option." The minister also lamented the lack of transformers and the practice of communities contributing money to pay for transformers.
“This must stop. It is the responsibility of the DISCO to provide distribution transformers to communities. IBEDC must be ready to supply transformers to communities where they are needed.” He said that the FG was ready to support DISCOs in the provision of such transformers.
“As part of the 2024 budget, we also have plans to intervene in acquiring transformers for communities. We will provide transformers across the nation.”
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