The Federal Government disclosed on Tuesday, July 2, that Nigerians expended a combined N16.5 trillion in 2023 on purchasing diesel, petrol, and generators to supplement their electricity needs.
Additionally, it was revealed that the formal power sector, encompassing electricity generation, transmission, and distribution companies, accrued total revenues of N1 trillion last year, contrasting starkly with the over N16 trillion spent by consumers in the informal sector.
Minister of Power, Adebayo Adelabu, made these revelations during the ongoing 2024 Nigeria Oil and Gas conference in Abuja. He highlighted that consumers in the Band A category now receive up to 24 hours of uninterrupted power supply.
He 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 N16.5tn 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 spending’s in this sector out of the grid is close to N20tn. And let me blow your mind, the revenue for the entire industry, the grid, I mean the formal power sector was just N1tn for 2023 that goes to the generation companies, transmission company and the distribution companies. Just N1tn formal revenue. But the informal spending’s on generators, diesel, petrol, was close to N20tn.
“Even if it is just a quarter of that is put in the official power sector, we are talking about incremental revenue of N5tn that will bring the sector’s revenue to N6tn, sincerely we are going to have something close to uninterrupted 24/7 power supply in Nigeria.”
The minister emphasized that the government is actively striving to regain the confidence of electricity consumers. He underscored the importance of opting for electricity from the national grid, highlighting that it is more cost-effective than relying on generators powered by diesel or petrol.
He continued: “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.”
