Abuja, Nigeria-In a staggering revelation at the 2024 Nigeria Oil and Gas conference held in Abuja, the Federal Government disclosed that Nigerians spent an unprecedented N16.5 trillion on diesel, petrol, and generators for power generation in 2023.
This colossal expenditure underscores the nation’s ongoing power challenges and the heavy reliance on self-generated electricity.
Minister of Power Adebayo Adelabu, speaking at the conference, highlighted the stark contrast between the informal and formal power sectors.
While consumers in the informal sector, including households and industries relying on self-generated power, spent over N16 trillion, the formal power sector, encompassing electricity generation, transmission, and distribution companies, reported a total revenue of only N1 trillion for the same period.
“If you know how much our people spend buying diesel, petrol, generators, and servicing them in a year; the last study we had in 2023, a total of N16.5 trillion was spent on this in self (power) generation.
Even a number of the industries are off the grid. They now have their captive power between their environments with gas-powered generators,” Minister Adelabu stated.
The minister further emphasized the potential benefits of channeling even a fraction of these expenditures into the formal power sector. “Spendings in this sector out of the grid is close to N20 trillion.
And let me blow your mind, the revenue for the entire industry, the grid, I mean the formal power sector, was just N1 trillion for 2023. If even a quarter of that is put in the official power sector, we are talking about incremental revenue of N5 trillion that will bring the sector’s revenue to N6 trillion. Sincerely, we are going to have something close to uninterrupted 24/7 power supply in Nigeria.”
Adelabu revealed that customers in the Band A category are already experiencing nearly continuous electricity, paying N206 per kilowatt-hour. In contrast, those relying on self-generation pay significantly more: N290 per kilowatt-hour for gas, N450 for petrol, and upwards of N900 for diesel.
The government’s goal is to restore trust and confidence in the national grid, encouraging industries and consumers to reconnect for a more cost-effective and efficient power solution. “As at the last study, Band A customers are enjoying uninterrupted supply and pay N206. For the companies that have their captive power using gas, they pay about N290/kwh.
For those that are using petrol generators, it is about N450 per kilowatt-hour. And for those using diesel to power their generators, it is upward of N900,” Adelabu explained.
This eye-opening report highlights the critical need for investment in Nigeria’s formal power sector to alleviate the financial burden on its citizens and pave the way for a sustainable, uninterrupted power supply.
