Generating Power Privately Now Costs N750/kWh, Says Minister

The Minister of Power, Adebayo Adelabu, has highlighted the rising costs of electricity generation for private entities due to the high prices of petrol and diesel. According to him, generating one kilowatt-hour of electricity using petrol now costs about N750, while diesel-powered generation costs around N950 per kilowatt-hour. These figures significantly exceed the N209 per kilowatt-hour tariff paid by customers in Band A, underscoring the cost-effectiveness of relying on the national grid.

During a recent event in Lagos, Adelabu addressed concerns over the Band A tariff, explaining that despite public opposition, it remains cheaper than self-generating power with petrol or diesel. He argued that the increase in revenue for power distribution companies is not an additional burden on consumers but rather a reallocation of resources that would otherwise be spent on fuel for private generators. He emphasized that the shift towards paying for grid electricity allows consumers to enjoy a more stable and affordable power supply.

Adelabu also pointed out that in 2023, Nigeria spent N16.5 trillion on petrol and diesel for power generation, while the power sector generated N1 trillion in revenue. With improved grid stability, he noted that many people are no longer spending heavily on fuel for generators, further justifying the current tariff structure.

The minister urged consumers to support ongoing reforms in the power sector to sustain these improvements and avoid reverting to expensive fuel generators. He assured that power generation is expected to increase to 6,000 megawatts by the end of the year, although he acknowledged that frequent grid collapses remain a challenge to achieving this target.