February 15, (THEWILL) – The Federal Government has said that it may soon halt payment of tariff differentials for customers as over N1.62 trillion is required for electricity subsidy in 2024.
Minister of Power, Adebayo Adelabu, made the disclosure at a briefing on Wednesday.
Emphasising that the payment of electricity subsidy is no longer sustainable, Adelabu said the nation must begin to move towards a cost-effective tariff model.
He said the Federal Government is currently indebted to the power generating companies (GenCos) and gas companies with about N1.3 billion each.
Consequently, Adelabu said the state governments would be granted access to generate power independently to supply power in their respective states.
According to the minister, only N450 billion was budgeted for subsidy this year but the ministry needs over 2 trillion naira for subsidy.
On the National grid that has collapsed for about six times between December 2023 and now, Adelabu said, it was caused by shortage of gas, ageing machines in the grid value chain, low capacity to evacuate generated power, and destruction of power stations in some parts of the North-East geopolitical zone of the country.
He said the Transmission Company of Nigeria has over 100 abandoned projects due to variations on contract figures as a result of the fluctuations of the forex, hence “the company will not award any new contracts till all such projects are completed”, he added.
The minister also said over N50 billion has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas.
Adelabu, who urged electricity distribution companies (DisCos) to sit up, warmed that the government would not hesitate to withdraw licenses of any erring DisCo.
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