The Federal Government can no longer continue to bear the cost of electricity tariff shortfalls while also being expected to provide power to every Nigerian, Power Minister Joseph Tegbe has said.
Tegbe made the statement while addressing the financial
challenges confronting Nigeria’s electricity sector, particularly the gap
between the cost of generating and supplying electricity and the tariffs paid
by consumers.
The minister explained that the government could no longer
sustain the existing arrangement in which it shoulders the financial burden
arising from electricity subsidies.
He also highlighted some of the major challenges affecting
the sector, including poor revenue collection, inadequate metering and
outstanding debts owed to electricity generation companies.
Tegbe disclosed that the government was considering a
transition from the Nigerian Bulk Electricity Trading (NBET) model to bilateral
electricity agreements, which would allow power suppliers and buyers to
negotiate commercial terms directly.
According to him, “the proposed arrangement is expected to
strengthen payment discipline and improve the financial sustainability of the
electricity market”.
The minister further revealed that Nigeria has a metering
gap of about 40 per cent, noting that more than 700,000 meters had been
deployed within six months, while the government planned to install 7.5 million
meters over the next two to three years.
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