New Telegraph

N30bn electricity subsidy’ll end by 2022 –FG

The Federal Govetnment has revealed that most of the subsidy payments to the electricity sector estimated at N30 billion monthly will come to an end by next year, 2022.

 

Speaking at the opening ceremony of the 14th Nigerian Association for Energy Economics/IAEE conference with the theme: ‘Strategic responses of energy sector to Covid-19 impacts on African economies’ on Monday in Abuja, the Vice President, Prof. Yemi Osinbajo, disclosed ongoing plans to invest over $3 billion to improve transmission and distribution infrastructures nationwide.

 

Represented by the Special Assistant to the President on Infrastructure, Engr. Ahmad Zakari, he noted that the government expected the electricity sector to generate its revenue from the power sector market.

 

While emphasising that the stabilisation of the electricity sector would increase the demands for power to capture the country’s large population, he stressed that President Muhammadu Buhari’s administration would continue to invest in power generation to cater for the current and future needs.

 

He said: “Electricity tariff reforms with the service based tariff has led to collections from the electricity sector by 63 per cent increasing revenue assurance for gas producers and stabilising the value chain.

 

“It is anticipated all electricity market revenues will be obtained from the market with limited subsidy from next year as reforms in metering and efficiency with the DisCos continue to improve.

 

“Accelerated investment in transmission and distribution, over $3 billion  will be out into this subsegment of the electricity value chain that will put us on the path to delivering 10 gigawatts through the interventions of the Central Bank of Nigeria, Siemens partnership, World Bank and Africa Development Bank, and others.”

 

President of the NAEE, Prof. Yinka Omorogbe, however, warned that Nigeria must take steps to align itself with global trend, as the energy transition and movement towards net zero carbon was real.

 

“A critical consideration of this season will show that it is a period when change cannot be stopped or hijacked, and that survivors will be those with the ability to adapt. It is here to stay for the time being.

 

“For African countries, which have the problem of low levels of access to modern energy services, and which have no option but to grow their energy industries, this presents a very interesting and- to meexciting challenge.

 

“Africa abounds in energy resources- coal, bitumen, crude oil, natural gas  solar energy, wind, tidal and wave energy, geothermal energy etc. The continent is blessed! Unfortunately these resources have so far not been harnessed so as to unlock their vast potentials for the use of the people.

 

“Again unfortunately, Nigeria has not only come to epitomise the paradox of poverty in the midst of plenty in the energy sector, but also has the strange revenue-draining paradox of being both a major exporter of crude oil and a major importer of petro-leum products which are subsidized at a cost that the nation cannot afford.”

 

On his part, Executive Secretary of the Petroleum Technology Development Fund (PTDF), Engr. Bello Gusau, said due to Covid-19, the economies of countries that rely on oil like Nigeria, were being grossly affected.

 

“Specifically, in Nigeria, where the oil sector accounts for half of the government’s revenue and 90 per cent of foreign exchange earnings, a trend that could potentially negative implications for quick economic recovery in a post Covid-19 era.”

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