FG Spends ₦‎600 Billion On Electricity Subsidy In 2023

Federal government has spent over N600 billion to subsidise electricity in 2023 alone, as forex unification and the high inflationary pressures in pushed cost-reflective tariffs to N124/kWh.

The Nigerian Electricity Regulatory Commission (NERC) which made this known revealed that the federal government paid the sum of N2.8 trillion to subsidise electricity consumed in the country from 2015 to 2022.

This is as the minister of Power, Adebayo Adelabu, is advocating for the pricing of gas utilised by the electricity Generation Companies (GenCos) in Naira to allow better management of the foreign currency-related inflationary trends in the sector.

The minister faulted the country’s current pricing of gas utilised by GenCos in US dollars, noting that that is the major issue in Nigeria’s power sector.

Speaking on Tuesday, at the ongoing three-day ministerial retreat in Abuja, Adelabu said. the pricing of gas utilised by GenCos in Dollars affects the pricing of electricity to end-users due to foreign exchange volatility.

“A hugely volatile variable that significantly affects the pricing of electricity to end-users. A more preferable option is to ensure that the gas utilised by the GenCos is traded in Naira to better manage the foreign currency-related inflationary trends that challenge the faithful application of the Multi-Year Tariff Order (MYTO) methodology,” he said.