Nigeria’s federal government is worried the amount of diesel and petrol generating sets that are imported into the country and used as alternative to the country’s unstable power supply is impacting on the profitability of the country’s grid power market.
It said the country loses about N24 billion every month to the generator market, in addition to over 300 million litres of diesel imported and consumed monthly by these generator users in the country.
The money spent to import diesel, it noted has continued to impact her foreign exchange market and reserves.
Its minister of state for power, works and housing, Mr. Suleiman Hassan, who spoke on behalf of the minister of power, works and housing, Mr. Babatunde Fashola, at the February 2018 edition of the monthly power sector operators meeting in Abuja, said these.
He explained the monies spent on diesel consumption in Nigeria, buying and maintain diesel generating sets are huge and could be counted as loses to her grid power market.
The minister however stated that the government is planning to ensure that up to 2000 megawatts (MW) of stranded power in the system are transmitted and distributed to target consumers who need them instead of having them remain idle.
“Many of them use diesel. Diesel importation has been declining over the last two years. Many are reporting that they ran their generators for noticeably few hours. This is progress. However, Nigerians still consume about 300 million litres of diesel every month and most of this is used to power generators,” said Fashola.
He further explained: “About 75 per cent is imported, putting pressure on scarce foreign exchange. Assuming 40 per cent of the consumption is used for power generation at an average of price of N200 per litre, electricity industry is losing N24 billion every month largely to imported energy.”
The minister added that: “At the same time, there is about 2,000MW of electricity generating capacity that is unutilised. Therefore the challenge of the moment before the industry is how to deliver the unutilised capacity to consumers who are willing to pay for it and are already paying dearly for alternatives.
“Problems like this require creative solutions and we don’t have any time to waste. The N701 billion intervention program is a creative solution that appears to be having the desired effect for stabilising the gas and generation end of the electricity industry.”