Nigerians Spent N16.5 Trillion on Fuel and Generators in 2023, Says Federal Government
Abuja, Nigeria — In 2023, Nigerians spent a staggering N16.5 trillion on purchasing diesel, petrol, and generators for power generation, according to the Federal Government. This expenditure, primarily driven by the need for self-generated power, starkly contrasts with the formal power sector’s total revenue of N1 trillion for the same year.
Minister of Power Adebayo Adelabu revealed these figures during the 2024 Nigeria Oil and Gas conference in Abuja. He highlighted the significant disparity between the expenditures on self-generated power and the revenues from the formal power sector, which includes electricity generation, transmission, and distribution companies.
“If you know how much our people spend buying diesel, petrol, generators, and servicing them in a year; the last study we had in 2023, a total of N16.5tn was spent on this in self (power) generation. Even a number of the industries are off the grid. They now have their captive power between their environments with gas-powered generators,” said Adelabu.
The minister further explained that informal sector spending on power generation neared N20 trillion. In stark comparison, the formal power sector’s revenue was just N1 trillion for 2023. Adelabu suggested that if even a quarter of the informal spending were redirected to the formal sector, it could significantly boost the sector’s revenue and improve power supply reliability.
“Even if it is just a quarter of that is put in the official power sector, we are talking about incremental revenue of N5tn that will bring the sector’s revenue to N6tn, sincerely we are going to have something close to uninterrupted 24/7 power supply in Nigeria,” Adelabu added.
The minister also addressed the current electricity costs for various power sources. Band A customers, who enjoy uninterrupted supply, pay N206 per kilowatt-hour, while companies using gas-powered generators pay about N290/kWh. Petrol generators cost around N450 per kilowatt-hour, and diesel generators exceed N900 per kilowatt-hour. He emphasized that the national grid remains the cheapest and most efficient power source for productive activities.
Adelabu assured that the government is working to restore trust and confidence in the formal power sector, aiming to encourage manufacturing companies to reconnect to the national grid. This move is expected to reduce the overall cost of power and enhance the reliability of electricity supply across Nigeria.
