The Minister of Power, Adebayo Adelabu, has announced that private entities will face costs of up to N750 to generate one kilowatt-hour of electricity, primarily due to the soaring price of petrol.
He highlighted that power generation using diesel-powered engines would be even more expensive, costing around N950 per kWh, according to The Punch.
Speaking in recent event in Lagos, Adelabu addressed concerns from Band A customers who have expressed dissatisfaction with the current tariff.
He emphasized that despite their objections, the N209 per kWh rate they pay remains significantly lower than the costs associated with self-generation using petrol or diesel.
The minister’s remarks underline the challenges faced by both consumers and power providers amid rising fuel costs.
Adelabu noted that the recent increase in revenue for power distribution companies has been characterized by the media as an added burden on consumers.
He clarified that this increase is merely a reallocation of resources stemming from rising fuel costs, rather than an additional financial strain on customers.
“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, the power sector generated a revenue of N1 trillion, while a staggering N16.5 trillion was spent on procuring petrol and diesel to operate 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 urged electricity consumers to support the distribution companies in sustaining the current reforms within the power sector, emphasizing that such support is crucial to avoid a return to reliance on fuel-powered 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 consistently assured Nigerians that power generation is expected to increase to 6,000 megawatts by the end of the year.
