The Minister of Power, Adebayo Adelabu has said Nigerians spent a total of N16tn to buy diesel, petrol and generators to get electricity in 2023.
Speaking at the NOG Energy Week with the theme, “Showcasing opportunities, driving investment and meeting energy demand” Adelabu attributed the redundancy in terms of growth and revenue generation in the power sector to customers’ patronage of other power generation sources.
He told the delegate at the conference that the formal power sector, including electricity Generation Companies (GenCos), Distribution Companies, (Discos) others realised a total revenue of N1tn last year which is far below the over N16tn spent by power consumers in the informal sector.
He said, “If you know how much our people spent buying diesel, petrol, generators, and servicing them in a year; the last study we had in 2023, a total of N16.5tn was spent on this in self-power generation.
“Even a number of the industries are off the grid. They now have their captive power between their environments with gas-powered generators.
“So, spending in this sector out of the grid is close to N20tn. And let me blow your mind, the revenue for the entire industry, the grid, I mean the formal power sector was just N1tn for 2023 that goes to the generation companies, transmission companies and distribution companies. Just N1tn formal revenue. But the informal spending on generators, diesel, and petrol, was close to N20tn.
“Even if it is just a quarter of that is put in the official power sector, we are talking about incremental revenue of N5tn that will bring the sector’s revenue to N6tn, sincerely we are going to have something close to uninterrupted 24/7 power supply in Nigeria”.
He noted that the fraction received by the informal sector is the reason behind the electricity categorisation in various bands to meet the demand of the customers while generating revenue needed to service the sector
According to him, the federal government was currently working hard to earn the trust of power consumers, stressing that it would be better to spend on electricity provided by the national grid because it is cheaper than spending on diesel or petrol-powered generators.
“That is what we are working on to ensure that that trust is back, that that confidence is back. And all the manufacturing companies that are doing self-generation can cut it off and reconnect to the national grid because it is the cheapest source.
“As at the last study, Band A customers are enjoying uninterrupted supply and pay N206. For the companies that have their captive power using gas, they pay about N290/kWh.
“For those that are using petrol generators, it is about N450 per kilowatt-hour. And for those using diesel to power their generators, it is upward of N900. So it is still the cheapest, most efficient and the least cost for our productive activities,” the minister stated.
Speaking further he noted that the power sector in Nigeria consumes the largest share of the country’s domestic gas supply
