According to the Federal Government, the amount spent on power subsidies in Nigeria is presently at N30 billion each month.
It revealed that the government’s electricity subsidy has been lowered by N20 billion per month as a result of improved power tariff collection by distribution companies.
This was mentioned by the government in a report on the status and overview of Nigeria’s electricity sector. Our correspondent received the paper from the Federal Ministry of Power in Abuja.
The Minister of Power, Sale Mamman, announced in February that the Federal Government was subsidizing energy supplies across the country to the tune of nearly N50 billion each month.
The government was concerned about the persistent complaints from ordinary Nigerians about the unavoidable and periodic increases in the cost of energy, according to Mamman.
He explained that the money was granted to help make up for the shortfall caused by power distribution firms’ inability to cover the cost of bulk electricity supplied by producing companies.
He went on to say that the subsidy diminished after a small increase in the tariff system, but that it was still a significant drain on the country’s economy.
However, the government claimed in a paper on the sector’s progress sighted in Abuja on Tuesday that its monthly electricity subsidy had fallen by N20 billion.
“Tariffs jumped by 36% from September 2020,” the government noted in the statement, explaining current power market revenues. Collections have increased by more than 60%.
“The monthly government subsidy has been decreased by N20 billion. In the December 2020 cycle, record receipts of N65 billion were set (from average of N39bn).
In addition to subsidizing power, the Nigerian government also subsidizes Premium Motor Spirit, often known as gasoline, despite opposition from both local and international organizations and experts.
The International Monetary Fund, for example, raised alarm earlier this month about the resurfacing of subsidies in Nigeria.
The development is alarming, according to the worldwide institution, especially given the low revenue mobilization.
by olusanya Olutayo