Despite tariff hike, FG ‘ll continue to subsidise electricity – Minister

BrandPower Magazine 05/04/2024Last Updated: 05/04/2024

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Despite tariff hike, FG ‘ll continue to subsidise electricity - Minister

The Minister of Power, Mr Adebayo Adelabu, says the Federal Government will continue to subsidise electricity for Nigerians, to guarantee stable and reliable supply.

Adelabu said this at the Ministerial Press Briefing Series organised by the Ministry of Information and National Orientation on Friday in Abuja.

He said that the recent increase in tariff affected only a small percentage of the country’s population ,adding that majority of Nigerians would continue to enjoy government’s subsidy.

The Minister of Power, Adebayo Adelabu during a briefing in Abuja on Friday said the recent increase in electricity tariff is a pilot in phasing out of electricity subsidy in the country.

BRANDPOWER reports that the Nigerian Electricity Regulatory Commission (NERC) had announced an increase in electricity tariff paid by Band A customers from N68/KWh to N225KWh.

BRANDPOWER also reports that Band A customers are those who enjoy electricity supply for 20 hours per day.

‘”From the latest statistics, we have about 12 million customers in the sector and this (tariff increase)will only affect about 1.5 million customers.

”The remaining 10 .5 million customers will continue to enjoy government’s subsidy, which is almost 70 per cent of the population

”This review is in conformity with our policy thrust of maintaining a subsidised pricing regime in the short run or in the short term with a transition plan to achieving a full cost reflective tariff for the sector over a period of three years,”he said.

The minister said that before the tariff increase, government was subsidising the cost of producing and transmitting electricity in the country by more than 50 per cent.

Adelabu said the government decided not to migrate to a cost reflective tariff or remove subsidy 100 per cent because it was sensitive to the pains being experienced by Nigerians presently.

The minister said: “This tariff review is in conformity with our policy thrust of maintaining a subsidised pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years.

“I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.”

“We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers.”