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Consumers To Pay More As FG Ends N30bn Monthly Subsidy On Electricity 

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Electricity consumers may have to contend with higher charges following the Federal Government’s decision to end most of its subsidy payments in the electricity sector come next year, 2022.

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Daily Independent reports that the government monthly subsidy in the electricity is estimated at N30 billion.

Vice President Yemi Osinbajo, gave the hint while speaking on Monday at the opening of the 14th Nigerian Association for Energy Economics/IAEE conference in Abuja with the theme: ‘Strategic responses of the energy sector to Covid-19 impacts on African economies.

The Vice President said the government expects the electricity sector to generate its revenue from the power sector market.

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Prof. Osinbajo who was represented by the Special Assistant to the President on Infrastructure, Engr. Ahmad Zakari noted that the government would be investing over $3 billion in the coming years to improve transmission and distribution infrastructures across the country.

He explained that the effort of President Buhari’s administration to reform the energy sector would ensure that the sector continues to play a critical role in the growth of the country’s social and economic wellbeing.

He said: “Electricity tariff reforms with the service based tariff has led to collections from the electricity sector by 63 per cent increasing revenue assurance for gas producers and stabilizing the value chain.

“It is anticipated all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DisCos continue to improve.

“Accelerated investment in transmission and distribution, over $3 billion will be out into this sub-segment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others”.

He stressed that as the electricity sector continues to be stabilized, more power is needed for the country’s large population.

“That is why this administration continues to invest in the generation to cater for our current and future needs”, he added.

The Vice President charged the participants to come up with solutions to key energy challenges facing the country, especially with the Covid-19 pandemic and energy transition.

Earlier, Minister of State Petroleum Resources, Chief Timipre Sylva pointed out that the Covid-19 which took the world by surprise in 2020, had a grave impact on the energy sector.

Also speaking at the event, Prof. Yinka Omorogbe, the President of the NAEE, warned that energy transition and movement towards net zero carbon is real, and Nigeria must take steps to align itself with the global trends.

“For some, change represents a move away from the warm and welcoming familiar, towards fearful horizons characterised by uncertainty.

“However, critical consideration of this season will show that it is a period when change cannot be stopped or hijacked and that survivors will be those with the ability to adapt. It is here to stay for the time being”, she stated.

Mrs Omorogbe added: “For African countries, which have the problem of low levels of access to modern energy services, and which have no option but to grow their energy industries, this presents a very interesting and- to me- exciting challenge.

“Africa abounds in energy resources- coal, bitumen, crude oil, natural gas, solar energy, wind, tidal and wave energy, geothermal energy etc. The continent is blessed! Unfortunately, these resources have so far not been harnessed so as to unlock their vast potentials for the use of the people.

“Again, unfortunately, Nigeria has not only come to epitomise the paradox of poverty in the midst of plenty in the energy sector but also has the strange revenue-draining paradox of being both a major exporter of crude oil and a major importer of petroleum products which are subsidized at a cost that the nation cannot afford”.

Speaking earlier, Engr. Bello Gusau, the Executive Secretary of the Petroleum Technology Development Fund, PTDF, noted that the Covid-19 pandemic has had a great impact on the economies of African countries especially those that rely on the export of crude oil.

“Specifically, in Nigeria, where the oil sector accounts for half of the government’s revenue and 90 per cent of foreign exchange earnings, GDP growth for oil has not been recovering as expected, a trend that could potentially have negative implications for quick economic recovery in a post-Covid-19 era”, he added.

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