N2.9tr Spent On Electricity Subsidy Not Sustainable – Minister

N2.9tr Spent On Electricity Subsidy Not Sustainable – Minister

During a Ministerial Press Briefing organized by the Ministry of Information and National Orientation in Abuja, Minister of Power, Adebayo Adelabu, revealed that the recent hike in electricity tariff for Band A customers was driven by the realization that spending nearly 10% of the nation’s national budget on subsidizing electricity alone was unsustainable……READ ALSO Senegal’s President Faye Appoints 25 Ministers To Form New Government

Adelabu highlighted that the power sector has been deprived of the necessary liquidity to sustain itself, making it unattractive for investments. The government currently subsidizes about 67% of the cost of producing, transmitting, and distributing electricity.

He emphasized that the new tariff regime is based on operators’ capacity to supply a minimum of 20 hours of electricity daily. If distribution companies (DisCos) fail to meet this requirement, customers will be downgraded to a lower band.

Adelabu clarified that the government has refrained from implementing a 100% withdrawal of electricity subsidy to avoid further hardship for Nigerians. The current regime is aimed at achieving operational sustainability for operators while gradually transitioning to a full cost reflective tariff over a period of three years.

He stressed that the tariff review is designed to protect the poor while ensuring a gradual shift towards a full cost reflective regime. Adelabu emphasized that while electricity is no longer cheap for Band A customers, the policy remains pro-poor, ensuring that the burden is shared equitably across different income groups.

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