The Minister of Power, Works and Housing, Babatunde Fashola said the Nigerian electricity supply industry is losing an estimated N24bn monthly as a result of the importation of fuel such as diesel for alternative sources of energy.
Fashola stated that Nigerians consume about 300 million litres of diesel every month and 75 per cent of this volume is imported, while about 40 per cent is used in generators for power purposes.
This was disclosed at the 24th monthly power sector stakeholders’ meeting hosted by the Transmission Company of Nigeria in Abuja on Monday, where Fashola, represented by the Minister of State II for Power, Works and Housing, Suleiman Hassan, explained that about N24bn was being lost by the sector as a result of the continuous importation of fuel, Punch writes.
“Many power consumers use diesel. Diesel importation has been declining over the last two years. Many are reporting that they ran their generators for noticeably few hours. This is progress. However, Nigerians still consume about 300 million litres of diesel every month and most of this is used to power generators,” he said.
“About 75 per cent is imported, putting pressure on scarce foreign exchange. Assuming 40 per cent of the consumption is used for power generation at an average of price of N200 per litre, the electricity industry is losing N24bn every month largely to imported energy.”
The Minister added that the amount used in importing fuel as an alternative source for generating power could be channelled for use in the electricity supply industry where about 2,000 megawatts of power remained unutilised.
“There is about 2,000MW of electricity generating capacity that is unutilised. Therefore, the challenge of the moment before the industry is how to deliver the unutilised capacity to consumers, who are willing to pay for it and are already paying dearly for alternatives.
“Problems like this require creative solutions and we don’t have any time to waste. The N701.9bn payment reassurance programme is a creative solution that appears to be having the desired effect for stabilising the gas and generation end of the electricity industry.
Fashola added that the eligible customer regulation allowed large consumers to buy their power directly from the generation companies and then enter into contracts with the Transmission Company of Nigeria and distribution companies to have the power delivered to them.
“To plan an orderly win-win implementation of this policy, the ministry is hosting a discussion with the Manufacturers Association of Nigeria and other interested large consumers of the policy on Tuesday (today),” the minister said.
He stated that the meter service provider regulation could unlock investments in metering, which was urgently needed to boost consumer trust and collection efficiency.