- NERC Chairman Sanusi reveals a potential N3.2 trillion subsidy burden if the electricity tariff hike is reversed.
- Only a fraction of the N645 billion subsidy allocated to 2023 has been funded, leaving a significant funding gap.
Sanusi Garba, Chairman of NERC, revealed a potential N3.2 trillion subsidy burden if recent tariff hikes are reversed. Speaking at a stakeholder meeting summoned by the House of Representatives Committee on Power in Abuja, Garba underscored the criticality of this issue.
He highlighted that only a fraction of the N645 billion subsidy allocated in 2023 has been funded, leaving a substantial funding gap of N459.5 billion.
Garba emphasised the detrimental effects of this shortfall, noting that it has contributed to dwindling gas supply and power generation. Moreover, he stressed the need for increased sector investments to ensure power reliability.
It should be noted that Discos previously covered minimal energy invoice portions. This liquidity challenge, exacerbated by the lack of cash backing for subsidies, poses a grave threat to the sector’s stability.
Garba cautioned that the industry faces an ominous future marked by continued power outages and system failures. This is without swift and decisive action to address underlying issues such as foreign exchange fluctuations and unpaid gas bills.
Victor Nwokolo, Chairman of the House Committee on Power, echoed Garba’s concerns, emphasising the situation’s urgency. Nwokolo pledged to convene further consultations, recognising the complex interplay of factors driving the need for tariff adjustments.
He stressed the imperative of considering alternative solutions, such as the possibility of gas sales in local currency, to mitigate the sector’s financial woes and ensure sustained power generation. With Nigeria’s power sector’s fate hanging in the balance, stakeholders remain poised for further deliberations in the coming days.