BUSINESS NEWS

FG spends N50b monthly on electricity subsidy

NEWSMAN, Abuja – Despite the worries and incessant complaints by many Nigerians over the unavoidable and periodic increase in the cost of electricity, the Federal Government it is still paying over N50 billion in electricity tariff subsidy.

The government spends the cash to complete what electricity cost since Distribution Companies (DisCos) refuse to pay the full cost of the electricity from the Generating Companies (GenCos) and Transmission Company of Nigeria (TCN).

Special Adviser, Media & Communications to the Minister of Power, Aaron Artimas, in a statement disclosed “The funds are provided to augment the shortfall by the Distribution Companies which have failed to defray the cost of bulk electricity supplied to them by the Generating Companies.

“However, following a minor increase in the tariff regime, the subsidy has decreased by half, but still constitutes a serious drain on the nation’s economy”, he said.

Minister of Power, Sale Mamman, receiving members of the Hausa Guild of Actors & Film Producers, otherwise known as Kannywood, expressed serious concern over the failure by the DisCos to stabilise their operations to meet their financial obligations to other players in the sector.

The minister said it was in response to this unfortunate development that the Federal Government has been forced to partly subsidise the sector so as not to price the cost of electricity out of the reach of the common man.

As part of the measures to assist ordinary Nigerians over their frustration in receiving adequate electricity supply, the Federal Government was forced to categorise electricity supply into various bands between highbrow areas and low income earners to enable everyone cope with the cost of electricity, Mamman explained.

The statement quoted the minister saying “Nigerians must understand that these companies were privatised long before the advent of this administration but the government has no alternative than to continue managing the sector before a final solution is secured, The Nation reported.

“Through the Presidential Power Initiative and other intervention measures, the government is diligently working to massively resolve all these inherited problems that have continuously frustrated the success of the sector”, he said.

Mamman noted that most of the DisCos were sold off and managed as family businesses which had made it difficult for them to be professionally managed, but despite this difficulty, the Government could not roll back  privatisation.

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