President Bola Tinubu has recently stopped the implementation of a hike in electricity tariff and insisted that subsidy be paid for power consumed nationwide.
The Minister of Power, Adebayo Adelabu, revealed on Wednesday that the Federal Government will investigate the legality of the five-year license extension granted to privatized power distribution and generation companies, whose licenses expire on October 31, 2023.
During a press briefing in Abuja, Minister Adelabu emphasized the government’s commitment to addressing non-performance within the power sector.
He stated that any non-performing chief executive in agencies under the power ministry would face dismissal if their performance jeopardized his position as minister.
Adelabu addressed the issue of a cost-reflective tariff, explaining that the government still subsidizes power due to the gap between the cost-reflective tariff and the allowed tariff.
Tinubu has refrained from approving a tariff hike until regular and incremental power supply is achieved.
Adelabu acknowledged that the delay in implementing a cost-reflective tariff has caused liquidity issues in the power sector but emphasized the government’s commitment to avoiding additional burdens on Nigerians.
The minister highlighted the challenges posed by the rising exchange rates, fuel subsidy removal, and inflation. He assured that tariff increases would be implemented at an appropriate time, following extensive sensitization and communication with the public.
Adelabu stressed the need for assured incremental and regular power supply before any tariff adjustment.
Addressing the power generation capacity, Adelabu deemed the current 4,000 megawatts power generation in Nigeria as shameful and unacceptable.
He affirmed ongoing efforts to increase power generation.
The minister reiterated President Tinubu’s stance on performance, emphasizing that any senior official failing to deliver would be relieved of their duties.
Adelabu expressed his belief that the privatization of the power sector in 2013 was a mistake and suggested that commercialization would have been a better approach.
Despite the government’s 40% stake in power distribution companies, Adelabu stated that the government might consider taking control of these companies.
He also mentioned a possible review of the territorial coverage of distribution companies.
The minister revealed an ongoing investigation into the extension of licenses for privatized power firms and emphasized the government’s commitment to a performance bond agreement with these firms.
Adelabu concluded by addressing the speculation about Nigeria supplying power to the Niger Republic, stating that it has not started and that the situation is being monitored by the Federal Government.
Recent statistics from the National Bureau of Statistics highlighted fluctuations in electricity customer numbers and revenue generation by distribution companies.
The minister assured a thorough investigation into the license extension and reiterated the government’s commitment to addressing challenges within the power sector.