Nigeria’s Minister of Power, Joseph Tegbe, has said the Federal Government cannot keep paying for electricity tariff shortfalls and still expect to provide power to every Nigerian.
Tegbe spoke on Friday at an energy conference organised by the Harvard Business School Association of Nigeria in Lagos. Energy experts at the event discussed the country’s power supply problems.
He blamed poor revenue collection, a lack of meters, unpaid debts to power generation companies and weaknesses in the electricity market for the unreliable power supply.
“Commercially viable pricing will work where the supplier can actually collect his money and get paid. There’s no sense in commercially viable pricing if you don’t collect money,” he said.
The minister said the government was reviewing the electricity market structure and the assumptions behind tariffs with the Nigerian Electricity Regulatory Commission.
He also questioned the continued use of the Nigerian Bulk Electricity Trading (NBET) model. Under the system, the government-owned company buys electricity in bulk and sells it to distribution companies.
“NBET ought to have been sunset about five years ago, and I’m telling you my own plan, at the end of the day, is to move from that model. That model will not help Nigeria. We can’t keep covering tariff shortfalls and think we’ll give power to every Nigerian,” Tegbe said.
He added that the government planned to shift towards bilateral electricity agreements. This would allow power producers to supply customers or distribution companies under agreed commercial terms.
