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FG Subsidizes Electricity with Over N50bn Monthly

Admin 16-Feb-2021 Business

The Federal Government has been subsidizing the electricity supply in the country to the tune of over N50 billion.

This is the result of concerns generated by the incessant complaints by ordinary Nigerians over the unavoidable and periodic increase in the cost of electricity, 

The government spends the money to complete what electricity actually costs since Distribution Companies (DisCos) refuse to pay the full cost of the electricity from the Generating Companies (DisCos) and Transmission Company of Nigeria (TCN).

Special Adviser, Media & Communications to the Minister of Power, Aaron Artimas, said these in a statement.

Said he: “The funds are provided to augment the shortfall by the Distribution Companies which have failed to defray the cost of bulk electricity supplied to them by the Generating Companies.

“However, following a minor increase in the tariff regime, the subsidy has now decreased by half, but still constitutes a serious drain on the nation’s economy," he said.

According to Artimas, while receiving members of the Hausa Guild of Actors & Film Producers, otherwise known as Kannywood, his principal, the Minister of Power Engr. Sale Mamman expressed serious concerns regarding the failure by the Distribution Companies to stabilize their operations to meet their financial obligations to other players in the sector.

He explained the minister said it was in response to this unfortunate development that the Federal Government has been forced to partly subsidize the sector so as not to price the cost of electricity out of the reach of the common man.

Mamman also said as part of the measures to assist ordinary Nigerians over their frustration in receiving adequate electricity supply, the Federal Government was forced to categorize electricity supply into various bands between highbrow areas and low-income earners to enable everyone copes with the cost of electricity.

The minister, according to the statement, said “Nigerians must understand that these companies were privatized long before the advent of this administration but the government has no alternative than to continue managing the sector before a final solution is secured.

“Government is diligently working to massively resolve all these inherited problems that have continuously frustrated the success of the sector”.

He further noted most of the DisCos were sold off and managed as family businesses which had made it difficult to be professionally managed, but that despite this apparent difficulty the Government cannot roll back the privatization process.

Mamman clarified while some of these problems persist, remarkable performance and progress have been achieved by the Federal Government, as the supply of electricity has stabilized at over 5,000 Megawatts, up from less than 4,000 Megawatts before President Muhammadu Buhari came to power.

He emphasized that Nigerians now enjoy a stable power supply from fifteen to twenty-four hours daily. The Minister blamed the shortfall or interruptions on supply to some quarters on faulty equipment and supply lines and called on consumers to report such developments to their distribution offices.

He also pointed out that it was the responsibility of the DisCos to replace faulty transformers, electricity poles and cables whenever they occur and warned the Distribution Companies to stop tasking ordinary Nigerians with these responsibilities before they could restore power interruptions.

While commending Nigerians on their efforts to pay for electricity despite the present economic and social problems facing them, he advised them to minimize their usage of electricity by switching off their appliances when they were not at home or when they were not immediately needed in order to reduce pressure on equipment supplying them power.

On metering, Mamman explained that although it was the responsibility of the Distribution Companies to provide the meters, the Federal Government has stepped-in in view of the public outcry overestimated billings. He said the Federal Government was committed to supplying over Six million meters free of charge to Nigerians.

He said about one million meters have already been delivered for distribution while the rest is being awaited.

The Minister called on the DisCos to expedite the distribution of meters free of charge to their consumers as a way of lessening their problems.

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