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From Isaac Anumihe, Abuja
Federal Government has ruled out suggestions for total removal of electricity subsidies, saying that it will be insensitive for the government to consider such now.
Minister of Power, Adebayo Adelabu, made this known in Abuja, yesterday, when he addressed heads of departments of agencies in the power industry regarding a new policy document to be adopted by them.
He told the gathering to discountenance calls for the total removal of subsidies because Nigerians are facing hard times.
“We’re in a very difficult situation in the country as it is today. A lot of people are passing through hardships resulting from the high inflation of almost 30 per cent; resulting from the devaluation of naira; resulting from the petroleum subsidy removal.
“And there are hardships and everybody feels it. So it’s not the time that anybody will call for a total removal of electricity subsidy.
“No. It will sound highly insensitive to the feelings of our people. So, what we intend to have in the policy is a roadmap.
Probably two to three years roadmap that will migrate us into a cost reflective tariff, which means that government’s subsidy will remain to the end. We will keep reducing it from time to time.
“As it is today, government’s subsidy is over 60 per cent of electricity tariff. Yes, about 66 per cent of tariff.
“But we cannot call for a removal of this subsidy. So, the policy will cover a methodical transition from the subsidy regime to a cost full cost reflective tariff regime for over two to three years so that every six months, we can be having minor tariff reviews. And everyone here will have a major tariff review in line with the existing cost of living circumstances.
“Capacity and affordability must be considered. So, the policy will cover that” he said.
The minister also stated that in the short to medium term plan, 30 per cent of the energy consumption should be in renewable by the year 2030. This, according to him, would augment the electricity supply from the grid.
“But as a short to medium term plan of 2030, we’re saying that 30 per cent of our energy should be in renewable by the year 2030. So when states adopt the use of renewable energy to augment or complement the supply, it’s also assisting in achieving an energy transition plan. And it’s not only solar power you can use.
“Solar is very good for the states in the north and middle belt and part of southwest. We have the small hydro plants across the 26 dams that we have from 1 megawatt to 50 megawatts. And we’re working with some of our partners to activate this and enter a concession agreement with interested power vendors across the country.
“And thirdly, there is the possibility of offshore wind, wind farm across the states along this coast. Along the coastal areas from Lagos to Delta to Rivers to Cross Rivers is a very effective and reliable source of energy provision.
“So, with the kind of challenges that we are having with gas supply, the kind of challenges we have with our large dams during the dry seasons, it’s time we started adopting this alternative source of energy. The solar, the small hydros, the wind energy. These are simple energy and reliable energy sources.
“We’re not talking nuclear energy now. We’re talking hydrogen sources. But these are simple and have been tested and trusted across the globe” he said. ENDS
