Controversy over power minister ignoring Nigerian company in 40 billion Norwegian mass metering contract

Tariff hike: FG still provides electricity subsidy – Adelabu

Minister of Power, Adebayo Adelabu, said that despite the recent rate increases for Band A customers, the federal government is still paying electricity subsidy.

He explained in an interview on Channels Television's Politics Today on Thursday that the government will have to pay about N1.8 trillion in electricity subsidies in 2024.

According to him, “The 2023 Electricity Act provides for twice-yearly rate reviews.''

He added that tariff reviews are legal as long as they fall within the exclusive responsibility of the Nigerian Electricity Regulatory Commission, NERC, stressing that the law provides for bi-annual and semi-annual reviews.

The minister said if the government had been paying the same level of fees for the past two years, that logically meant someone was paying for the price increase.

He said that looking at the total cost of production, transmission and distribution, the Nigerian government is bearing 67 per cent of that cost before the rate increase for Band A customers.

He explained that the government pays 90%, but when the cost of generation is taken into account, the total subsidy amount is about 67% of the tariff.

He said last year's amount was about 720 billion naira, which was not fully covered, but added that the government has provided about 305 billion naira this year, adding that if tariffs are maintained at the current level, it will be about 2.9 trillion naira. He pointed out that it would be 100 million naira. Necessary for electricity assistance.

He explained that due to the increase in Band A customers, the government will reduce subsidies by about N1.1 trillion, or about N1.8 trillion.

Mr. Adelabu explained that the fact that Band A charges, which account for 15% of all consumers, will increase by more than 200% does not necessarily mean that electricity bills will increase by 200% if electricity consumption is managed.

He said customers in Band A get value for money and consumers in other bands will not be disrespected by distributors as regulators will not hesitate to give such discotheques a big crack. I assured you that it wasn't.

He said the government had shifted its attention to discos that were being run inefficiently and would not hesitate to take appropriate measures in the interest of consumers, adding that the He pointed out that the reduction in efficiency would also have the effect of generating naira profits. There should be a positive relaxation in the tariffs paid by Nigerians against the dollar in the past few weeks.

He said the tariff is flexible, explaining that if the Naira appreciates in the foreign exchange market, the tariff could drop below the current Naira 225 per kilowatt hour.

The minister further said that 25 per cent of Nigeria's electricity generation comes from hydropower and the remaining 75 per cent from gas plants, adding that the government plans to increase generation from about 4,000 MW to 6,000 MW within the next six months. He explained that he is working on increasing the number. .

He assured that President Bola Tinubu’s administration plans to decentralize power generation and strengthen energy transmission and distribution across the states of the federation to accelerate Nigeria’s industrial transformation.


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