Tinubu Govt Still Paying Electricity Subsidy Despite Band A Tariff Hike — Adelabu

The Minister of Power, Adebayo Adelabu, has said the Federal Government is still paying subsidy on electricity despite the recent hike in tariff paid by Band A customers.

Adelabu, a former Oyo State governorship candidate, stated this in an interview on Channels Television’s Politics Today programme on Thursday.

The minister said the government has about N1.8trn to pay in electricity subsidy for 2024, dismissing claims that the federal government had removed subsidy on electricity in 2022.

He stated that the reason the government is still paying the subsidy on electricity is the rising dollar, soaring gas prices, and the cost of power plants, transmission and distribution infrastructure, amongst others in the last two years.

Adelabu insisted that the Electricity Act of 2023 made provisions for the review of tariffs twice a year, contrary to the claim by human rights lawyer, Femi Falana, that the increase in tariff paid by Band A consumers was illegal.

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 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 the tariff at the current level, the Nigerian Government will need 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.”

On the tariff hike for Band A customers, the minister assured the customers of value for their money.

The minister also assured Nigerians that consumers of other bands won’t be shortchanged by distribution companies as the regulators won’t hesitate to wield their big stick on any of such discos.

He said, “The fact that the tariff for Band A, which is 15% of the total consumers will increase by over 200%, does not necessarily translate into a 200% increase in their electricity bill if power is properly managed in terms of consumption.”

Adelabu also said the government has shifted its attention on discos inefficiently run and won’t hold back in taking the appropriate steps in the interest of consumers.