Stakeholders in the power sector have faulted the plans of the federal government to spread proportional tariff to more Nigerians under governments cost-reflective pricing to address huge subsidy obligations in the country.
Adelabu reportedly stressed this during a meeting with the chairmen of Nigeria’s electricity generating companies (GenCos) in Abuja, where he said the country’s economy is under strain and can no longer sustain the rising cost of electricity subsidies.
We must recognise that our economy cannot sustain subsidies indefinitely, Adelabu stated, revealing that, the government currently owes over N4trillion to GenCos in unpaid subsidy debts and may have to resort to borrowing to offset the liability.
The new tariffs would reflect the actual cost of power generation and delivery. Citizens must pay the appropriate price for the energy consumed, Adelabu was quoted as saying.
But in his reaction, the president of the Nigerian Consumer Protection Network, Kunle Kola Olubiyo, complained that, Nigeria’s power sector has long been plagued by inefficiencies, poor electrification rates, as well as chronic power outages and shortages. He said, currently access to stable and reliable electricity remains a major constraint to industrial growth and economic development.
Our correspondent reports that, based on data from Nigerian Electricity Regulatory Commission (NERC), Nigeria’s installed power generation capacity is currently about 13,625 MW but the operational output was only reported to be 5,339MW recently. Thus, the power sector continues to lag behind in meeting the nation’s energy demands.
Olubiyo suggested that one of the most effective strategies to overcome these challenges is digitalisation as digital technologies have been pivotal in revolutionising power sectors across the world, enhancing efficiency, and ensuring sustainability.
Nigeria’s grid infrastructure is largely inefficient, operating at an average of only about 40 per cent of its capacity, forcing millions to turn to costly and non-ecofriendly diesel generators.
According to Olubiyo, the significant portion of power generation and distribution infrastructure of the country is outdated leading to frequent power outages.
“The grid failures, which happen frequently, are a severe handicap on industrial production, business activities and day-to-day life of the citizens.
“Also, the challenge of vandalism of power infrastructure, which is yet to be fully addressed has also been a huge cog in the wheel for reliable supply of electricity and with destruction of transmission lines, substations and distribution networks have caused many interruptions in service leading to high costs of repairs,” he stressed.
He said: “For us to get it right, generation has to be private sector led, because public sector business model is not about making profit. The private sector business model is about efficiency and revenue optimisation, customer centricity, and what have you. So, generation as it were is public sector led.
“Distribution, as it is, is public sector led with some semblance of equity with government having a stake. So, Transmission Company of Nigeria, as it is now, is a misnomer to remain a public sector business model as a cash cow. We want the national grid that is within the purview of the federal government to be completely privatised.”
Recent data from the Nigerian Electricity Regulatory Commission (NERC) highlighted the growing gap between electricity production costs and what consumers are charged.
As of February 2025, the real cost of electricity stood at N116.18 per kilowatt-hour, while the average consumer tariff was N88.20 creating a subsidy difference of nearly N28 per kilowatt-hour.
The NERC noted that all customers in the Nigerian Electricity Supply Industry (NESI) with the exception of the top 15 per cent (Band A) are currently benefiting from government subsidies.
Meanwhile reacting to the National Integrated Energy Policy (NIEP), the convener and Executive Director of PowerUp Nigeria, a Power Consumer Advocacy Group, Adetayo Adegbemle said, though, the president signed off on the policy, “there’s not much enthusiasm about it because nobody can confidently say it addresses our present challenges, neither does it give us future direction for the power sector.
While much was said about increase in power generation, there’s a skewed focus on Renewable as main source of energy.”
“We can all see what’s happening in Germany with Factories shutting down everyday.
The Policy plan also targeted raising estimated $122 million by 2040, however, nothing is said on how this finance will be raised, or how it will contribute to the national GDP,” he stressed.
He noted that, there are other issues like the proposed upgrading of NBET to an Exchange, however, this does not go with the Electricity Act that breaks down TCN to establish an Independent System Operator
