The administration led by President Bola Tinubu has hinted at yet another increase in electricity tariffs nationwide. Headlinenews.news
This announcement comes just 48 hours after the Nigerian Electricity Regulatory Commission (NERC) greenlit a tariff hike for customers falling under Band A.
During a press briefing in Abuja on Friday, April 5, 2024, Minister of Power, Adebayo Adelabu, revealed this development.
He emphasized that the recent tariff adjustment signifies a phased approach towards eliminating electricity subsidies in the country. Adelabu stressed the government’s intent to phase out all subsidies in the sector, facilitating increased investment in the power industry.
Adelabu articulated, “Our tariff review aligns with our strategic approach of initially maintaining a subsidized pricing structure in the short term, with a gradual transition towards a fully reflective tariff over approximately three years.” He emphasized the government’s commitment to easing the burden on citizens, stating, “We’re mindful of the hardships faced by our people, hence our reluctance to swiftly adopt a fully cost-reflective tariff or eliminate subsidies entirely, akin to actions taken in the oil and gas sector.”
Highlighting the incremental nature of the transition, Adelabu explained, “We’re embarking on a gradual shift from subsidy reliance to a fully reflective tariff regime, commencing with select customers.” He described the current adjustment as a pilot project, targeting customers with sufficient infrastructure to guarantee stable power supply, enabling them to benefit from the tariff adjustment.
Adelabu underlined the comparative affordability of electricity for Band A customers, who are charged significantly less than the N500 they typically spend on alternative energy sources such as diesel. He emphasized the financial strain posed by subsidies, revealing that the government would have incurred a staggering N2.9 trillion in subsidy payments for 2024, a considerable portion of the national budget. He stressed the need to allocate resources to other pressing national priorities, highlighting the necessity of transitioning away from subsidy dependence in the power sector.
