The Minister of Power, Adebayo Adelabu, has said that private entities will need up to N750 to generate one kilowatt-hour of electricity because of the high cost of petrol.
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Adelabu said power generation will cost N950 per kilowatt-hour for those using diesel-powered engines.
These, he argued, are more expensive than the N209/kWh being paid by Band A customers.
Speaking at a recent function in Lagos, the minister emphasised that though customers were kicking against the Band A tariff, they knew it was still cheaper compared to generating their own power with petrol or diesel.
Adelabu hinted that the increase in revenue of the power distribution companies was described as an additional burden on the customers by the media, saying it was just a reallocation of resources from fuel.
“I need to correct an impression. There’s a section of the media that says this revenue is an additional burden on the consumers. No, it is not. It is just a mere reallocation of resources from what they used to spend on petrol and diesel. Now they are paying to enjoy a good power supply,” he stated.
The minister recalled that in 2023 a revenue of N1tn was made in the power sector while N16.5tn was spent in procuring petrol, and diesel to run power generators.
“But today that we have a more stable supply than we used to have, a lot of people do not spend on fuel again, not on diesel, not on petrol. Now, we are charging N209 as a full cost-reflective tariff for Band A, but for you to generate a kilowatt hour of power using a petrol generator to pay, at this rate of N1,000 per litre, it is going to be about N750 for a kilowatt-hour; and for diesel, it remains about N915.
“So, power sector consumers are like a beautiful bride that has now tried two matrimonies. If they want to be sincere, they know which of the husbands to remain with,” Adelabu noted.
He called on electricity consumers to support the Discos to sustain the present reforms in the sector to prevent going back to fuel generators.
“So, we are adopting commercialisation in the sector to enable investors to have a line of sight to the return of their investments,” he stated.
Adelabu has repeatedly assured Nigerians that power generation would rise to 6,000 megawatts by the end of the year.
However, incessant cases of grid collapse might be an obstacle to this plan.
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