Private power generation now priced at N750 per kWh
Adebayo Adelabu, the Minister of Power, has indicated that private firms may face expenditures of up to N750 to generate one kilowatt-hour of energy, owing to the rising price of petrol.He stated that power generation utilising diesel-powered engines would be even more expensive, costing roughly N950 per kWh, according to The Punch.
Adelabu addressed Band A subscribers' complaints about the current rate at a recent event in Lagos.
He emphasised that, notwithstanding their reservations, the N209 per kWh rate they pay is still much less than the expenditures involved with self-generation using petrol or diesel.
The minister's words highlight the issues that customers and power providers confront as fuel costs rise.
Adelabu pointed out that the recent increase in revenue for power distribution corporations has been portrayed in the media as an additional burden on consumers.
He underlined that the rise is simply a reallocation of resources caused by rising gasoline costs, not an additional financial burden on customers.
"I have to correct an impression. There is a part of the media that believes this revenue is an additional burden on consumers. No, it's not. It's simply a reallocation of resources from what they used to spend on gas and diesel. "They are now paying to have a good power supply," he explained.
The minister recalled that in 2023, the electricity sector generated N1 trillion in revenue, while N16.5 trillion was spent on petrol and diesel to run power plants.
"But now that we have a more constant supply than we did in the past, many people do not spend money on gasoline anymore, not diesel or petrol. We are now charging N209 as a full cost-reflective tariff for Band A, but if you create a kilowatt hour of power using a petrol generator, at this rate of N1,000 per litre, it will be around N750; for diesel, it will stay around N915.
"So, power sector consumers are like a lovely bride who has already attempted two marriages. "If they want to be sincere, they know which of the husbands to stay with," Adelabu said.
He urged electrical consumers to help distribution companies maintain the existing reforms in the power sector, emphasising that such assistance is critical to avoiding a return to dependency on fuel-powered generators.
"So, we are adopting commercialisation in the sector to enable investors to have a line of sight to the return of their investments," he told me.
Adelabu has continuously guaranteed Nigerians that power generation will increase to 6,000 megawatts by the end of the year.
Leave A Comment