FG Announces Plans For Electricity Tariff Increase

FG Announces Plans For Electricity Tariff Increase

The Federal Government, under the leadership of Bola Tinubu, has disclosed its intention to implement further increases in electricity tariffs, signaling a shift away from subsidies in the power sector. Minister of Power, Adebayo Adelabu, conveyed this message during a press briefing in Abuja on Friday……READ ALSO Nnamdi Kanu Rejects Criminal Charges, Files Appeal Against FG

Adelabu clarified that the recent tariff hike by the Nigerian Electricity Regulatory Commission (NERC) for customers categorized under Band A is part of a phased-out approach to eliminate electricity subsidies in the country. He emphasized the government’s commitment to fostering investment in the power sector by removing subsidies gradually.

According to Adelabu, Nigeria currently operates under a subsidy pricing regime where the government shoulders a significant portion of the generation, transmission, and distribution costs. He stressed that the tariff review aligns with the government’s policy of transitioning to a fully cost-reflective tariff over a period of approximately three years.

Acknowledging the challenges faced by the populace, Adelabu emphasized a cautious approach, opting for a gradual transition rather than an abrupt removal of subsidies. He highlighted the importance of starting the journey toward a full cost-reflective tariff by implementing incremental changes, starting with certain customer categories.

The minister pointed out that Band A customers, currently charged N225 per kilowatt-hour, still pay significantly less than the N500 they would spend on alternative energy sources such as diesel. Adelabu underscored the government’s reluctance to continue subsidizing electricity at the expense of other pressing national priorities.

The announcement reflects the government’s strategy to balance the need for sustainable economic development with the welfare of its citizens, as it navigates the complexities of energy pricing reforms.

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