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The Federal Government has disclosed the challenges in maintaining subsidies on electricity, citing the escalating power debt and the need for a shift towards a cost-effective tariff model. Minister of Power, Adebayo Adelabu, revealed that Nigeria’s power debt has reached alarming levels, standing at N1.3 trillion to electricity generating companies and $1.3 billion to gas companies.
Speaking at a press conference in Abuja, attended by heads of all agencies under the Federal Ministry of Power, Adelabu emphasized the necessity of transitioning towards a more sustainable tariff structure. He highlighted that while only N450 billion was allocated for electricity subsidy in the 2024 budget, Nigerian Electricity Regulatory Commission projections indicate that subsidy expenses could soar to approximately N2.9 trillion this year.
Adelabu underscored the complexity of the crisis in the power sector, citing instances of the national grid collapsing multiple times between December 2023 and the present. Factors contributing to these challenges include gas shortages, aging infrastructure, limited capacity for power evacuation, and damage to power stations in parts of the North-East geopolitical zone.
