With over N1.62 trillion required for electricity subsidy in 2024, the Federal Government (FG) said it may soon halt payment of tariff differentials for customers.
Already, it said with the rising debt to the power generating companies (GenCos) fixed at N1.3 trillion, subsidy payments were not sustainable.
The Minister of Power, Adebayo Adelabu, who made the disclosure at a briefing on Wednesday said the nation must begin to move towards a cost-effective tariff model.
Adelabu said beyond the N1.3 trillion indebted to the GenCos, FG was still owing gas companies about N1.3 billion.
As a result, he believed that 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.
He said state governments will now be allowed to generate power independently to supply power to their states.
On the grid that has collapsed for about six times between December 2023 and now, he said this 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.
The minister also said over N50 billion has been earmarked in the 2024 budget to build mini-grids to supply power to remote areas.
To this end, he urged electricity distribution companies (DisCos) to sit up adding that the government would not hesitate to withdraw licenses of any erring DisCo.
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