Nigerian Govt can no longer cover electricity tariff shortfalls — Power Minister

The Federal Government can no longer absorb the cost of electricity tariff shortfalls while also being responsible for supplying power to all Nigerians, Power Minister Joseph Tegbe stated.

Tegbe’s remarks came in response to the financial difficulties plaguing Nigeria’s electricity sector, particularly the disparity between the costs of electricity generation and distribution and the tariffs consumers are charged.

The minister emphasized that the current system of government-subsidized electricity cannot continue, as it places an unsustainable financial burden on the government.

Tegbe identified several key issues affecting the sector, including poor revenue collection, inadequate metering, and substantial debts owed to electricity generation companies.

To address these challenges, the government is exploring a shift from the Nigerian Bulk Electricity Trading (NBET) model to bilateral electricity agreements. This change would enable direct negotiations between power suppliers and consumers regarding commercial terms.

“The proposed arrangement is expected to strengthen payment discipline and improve the financial sustainability of the electricity market,” Tegbe stated.

He also noted that Nigeria is facing a metering gap of approximately 40 percent. In recent months, over 700,000 meters have been deployed, with plans in place to install an additional 7.5 million meters over the next two to three years.

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