FG Sounds Alarm: Electricity Subsidy No Longer Viable As Power Debt Surges

FG Sounds Alarm: Electricity Subsidy No Longer Viable As Power Debt Surges

The Federal Government sent shockwaves through the nation today as it declared the unsustainable nature of electricity subsidies, citing a burgeoning power debt that has reached alarming proportions……READ ALSO FG Contemplates Establishment Of Commodity Board To Address Food Security Challenges

In a press conference held in Abuja and attended by key figures from various agencies under the Federal Ministry of Power, Minister Adebayo Adelabu delivered the stark revelation. He disclosed that Nigeria’s indebtedness to electricity generating companies had skyrocketed to a staggering N1.3 trillion, with an additional $1.3 billion owed to gas suppliers.

Adelabu emphasized the pressing need to transition towards a cost-effective tariff model, underscoring the dire financial constraints faced by the government. Despite allocating a mere N450 billion for electricity subsidies in the 2024 budget, projections by the Nigerian Electricity Regulatory Commission paint a grim picture, estimating subsidy expenditure to balloon to approximately N2.9 trillion this year.

The minister shed light on the multifaceted crisis gripping the power sector, attributing grid collapses—totaling six occurrences since December 2023—to a myriad of factors. These include gas shortages, aging infrastructure within the grid, inadequate capacity for power evacuation, and the devastating impact of power station destruction in the North-East region of the country.

As the nation grapples with this dire reality, stakeholders brace themselves for the seismic shifts ahead, recognizing the urgent imperative to chart a sustainable path forward in the realm of electricity provision.