The Minister of Power, Adebayo Adelabu, said the Federal Government has about one point eight trillion naira to pay in electricity subsidy for 2024, despite the recent hike in tariff paid by Band A customers.
Adelabu, who stated this in an interview with newsmen on Thursday, noted that the government is still paying subsidies on electricity. Adelabu said the Electricity Act, 2023 made provisions for the review of tariff twice a year.
He said, “Review of tariff is actually legal once it is within the exclusive responsibility of the Nigerian Electricity Regulatory Commission (NERC). The Act actually provides for review twice in a year, every six months.”
“If we have been paying the tariff at the same level in the last two years, it logically means that someone has been paying the burden of all these increases.
“As it is today, looking at a total production, transmission and distribution cost, the Nigerian Government is bearing 67% percent of that cost before the increase in tariff for Band A customers.
“But when you look at generation cost, the Nigerian Government is paying 90% but in terms of total subsidy, it is about 67% of subsidy on the tariff.
“Last year, it was about N720bn which was not fully funded, we have about N305bn carried into this year. If we retain tariff at the current level, the Nigerian Government will be needing about N2.9trn to subsidise electricity but with the increase for Band A customers, we are going to have a reduction of about N1.1trn. So, we are looking at about N1.8trn in subsidy,” he said.
While apologizing to consumers for advising them on electricity utilization, the minister said he never meant that people should switch off their freezer, instead it was innocent advice with regards to energy consumption.
Recall that on April 3, 2024, NERC raised electricity tariff for customers enjoying 20 hours power supply daily. Customers in this category are said to be under the Band A classification.
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