{"id":796,"date":"2023-10-23T08:34:23","date_gmt":"2023-10-23T08:34:23","guid":{"rendered":"https:\/\/arritoneconsult.com.ng\/blog\/?p=796"},"modified":"2023-10-23T08:34:24","modified_gmt":"2023-10-23T08:34:24","slug":"affirms-necessity-of-electricity-subsidy-for-affordability","status":"publish","type":"post","link":"https:\/\/arritoneconsult.com.ng\/blog\/2023\/10\/23\/affirms-necessity-of-electricity-subsidy-for-affordability\/","title":{"rendered":"Affirms Necessity of Electricity Subsidy for Affordability"},"content":{"rendered":"\n

The Association of Electricity Distributors of Nigeria (ANED) Affirms Necessity of Electricity subsidy is imperative for ensuring the affordability of power in Nigeria. ANED emphasized that most Nigerians would be unable to bear the actual cost of electricity without this financial cushion.<\/p>\n\n\n\n

David Adeyeye, ANED’s Regulatory Specialist, conveyed this perspective during a recent live television interview. He underscored the need for the Federal Government to sustain the Affirms Necessity of Electricity subsidy until the power industry matures and reaches a stage where it can adopt cost-reflective tariffs.<\/p>\n\n\n\n

One key factor in this stance is the current reality in the foreign exchange market. The exchange rate between the Nigerian naira and the U.S. dollar stands at approximately N1,150, making it financially challenging to impose the actual cost of electricity on Nigerian consumers. Adeyeye pointed out that a subsidy is vital to allow Nigerians continued access to electricity, which, in turn, is essential for driving the nation’s economy.<\/p>\n\n\n\n

Adeyeye emphasized that subsidies for the power sector are not unique to Nigeria, as they are prevalent worldwide, especially in capital-intensive industries like the energy sector. He contended that the Nigerian government should continue to support the industry through subsidies to keep it operational and accessible to the population.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

He provided historical context, noting that in 2013, the Federal Government, through the Central Bank of Nigeria, established a stabilization fund to bridge the gap between cost-reflective tariffs and the rates charged by distribution companies (Discos). Furthermore, the government introduced the N701 billion payment assurance guarantee to mitigate market shortfalls.<\/p>\n\n\n\n

Market shortfalls primarily arise from the tariffs set by the regulator, the Nigerian Electricity Regulatory Commission (NERC), which are often not cost-reflective. This means that power generators (Gencos), distribution companies (Discos), and the Transmission Company of Nigeria (TCN) sell electricity to consumers at artificially suppressed prices compared to their production costs. To counteract this imbalance, the government has been ensuring the timely payment of the revenue shortfall gap to the Nigerian Bulk Electricity Trading Plc (NBET) to allow Gencos to continue generating power.<\/p>\n\n\n\n

Adeyeye clarified that the government’s intervention isn’t directly providing funds to Discos but rather facilitating the necessary financial mechanisms to support the entire power sector. He argued that this approach is essential for ensuring the sector’s efficiency and functionality. In sum, the subsidy plays a critical role in maintaining a stable and accessible electricity supply in Nigeria.<\/p>\n\n\n\n

For more news visit https:\/\/arritoneconsult.com.ng\/blog<\/a><\/p>\n\n\n\n

For more educational post visit examhood.com.ng<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Association of Electricity Distributors of Nigeria (ANED) Affirms Necessity of Electricity subsidy is imperative for ensuring the affordability of power in […]<\/p>\n","protected":false},"author":4,"featured_media":105,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[28],"tags":[],"class_list":["post-796","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"\nAffirms Necessity of Electricity Subsidy for Affordability - Arritone Consult<\/title>\n<meta name=\"description\" content=\"Affirms Necessity of Electricity Subsidy in Ensuring Access to Power \u2013 A Closer Look at the Ongoing Need for Electricity in Nigeria.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/arritoneconsult.com.ng\/blog\/2023\/10\/23\/affirms-necessity-of-electricity-subsidy-for-affordability\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Affirms Necessity of Electricity Subsidy for Affordability - 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