The hefty expenditure indicates the country's ongoing energy crisis, as many Nigerians continue to rely heavily on alternative power sources due to inconsistent electricity supply.
Nigeria's minister of power, Adebayo Adelabu, has admitted that Nigerians spent a total of N16.5trillion on diesel, petrol, generators, and related servicing in 2023 amid the failure of the government to provide stable supply.
The hefty expenditure indicates the country's ongoing energy crisis, as many Nigerians continue to rely heavily on alternative power sources due to inconsistent electricity supply.
Adelabu made this known on Tuesday, at the 2024 Nigeria Oil and Gas conference in Abuja, where he disclosed that the formal power sector, including electricity generation, transmission, and distribution companies, made a total revenue of N1trillion last year amid the over N16trillion spent by power consumers in the informal sector.
The minister, under whose watch the national grid had collapsed several times and electricity tariffs had gone up, said, “If you know how much our people spend buying diesel, petrol, generators, and servicing them in a year; the last study we had in 2023, a total of N16.5trillion 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 spendings in this sector out of the grid is close to N20trillion. And let me blow your mind, the revenue for the entire industry, the grid, I mean the formal power sector was just N1trillion for 2023 that goes to the generation companies, transmission company and the distribution companies. Just N1trillion formal revenue. But the informal spendings on generators, diesel, petrol, was close to N20trillion.
“Even if it is just a quarter of that is put in the official power sector, we are talking about incremental revenue of N5trillion that will bring the sector’s revenue to N6trillion, sincerely we are going to have something close to uninterrupted 24/7 power supply in Nigeria."
The minister said the 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 was 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.
The Minister explained that the power sector in Nigeria consumes the largest share of the country’s domestic gas supply.
He, however, called on the investors at the conference to strongly consider investments in the further development of gas production in the country, especially Nigeria’s abundant unexploited non-associated gas reserves.