Nigerians collectively spent a staggering N16.5 trillion on diesel, petrol, and generators in 2023, to meet their electricity needs, the Federal Government disclosed on Tuesday.
This figure, which reflects expenditures in the informal power sector, stands in stark contrast to the formal power sector’s revenue of N1 trillion for the same year, encompassing electricity generation, transmission, and distribution.
Addressing attendees at the 2024 Nigeria Oil and Gas conference in Abuja, Minister of Power, Adebayo Adelabu pointed out the disparity between informal sector spending and formal sector revenue.
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He said that industries and individuals resorting to off-grid solutions, such as gas-powered generators for captive power, contributed significantly to the informal sector’s expenditures, pushing the total spend to nearly N20 trillion.
Adelabu stressed the potential economic gains if even a fraction of these informal expenditures were redirected to the official power sector.
“Even if just a quarter of that is put into the official power sector, we are talking about incremental revenue of N5 trillion,” he stated optimistically. This influx, he argued, could substantially boost the formal sector’s revenue to approximately N6 trillion, potentially paving the way for nearly uninterrupted 24/7 power supply nationwide.
The minister stressed the government’s commitment to restoring trust and confidence in the national grid, highlighting its cost-effectiveness compared to diesel or petrol-powered alternatives. He noted that Band A customers currently enjoy uninterrupted power supply at a significantly lower cost per kilowatt-hour compared to those using alternative power sources.
Adelabu also advocated for increased investment in Nigeria’s gas sector, noting its pivotal role in sustaining the country’s power generation capacity. He outlined ambitious targets under the Nigeria Energy Transition Plan, aiming for a substantial increase in thermal energy production sourced predominantly from gas, alongside a significant contribution from renewable sources by 2030.
Adelabu called upon investors at the conference to consider opportunities in expanding Nigeria’s gas production capabilities, leveraging the country’s abundant non-associated gas reserves. He assured stakeholders of the government’s commitment to creating a conducive environment for investments in the power sector, underscoring its readiness to support and facilitate sustainable growth and development in Nigeria’s energy landscape.
