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.
Nigerian Govt can no longer cover electricity tariff shortfalls — Power Minister