Minister of Power, Adebayo Adelabu, said that the implementation of a higher tariff band A has led to a decrease in electricity subsidy, reducing it from approximately N3 trillion to N1 trillion.
The statement was made by the minister during the public hearing on electricity rates in Abuja on Tuesday.
The House of Representatives Joint Committee on Power, Commerce, National Planning, and Delegated Legislation coordinated the hearing.
Mr. Adelabu mentioned that if there wasn’t a rise in electricity charges, the projected subsidy would have approached nearly N3 trillion.
He mentioned that the Federal Government was unable to cover the cost of N3 trillion in subsidies.
The minister highlighted that rather than accumulating debt for the government, the ministry devised a system allowing customers to cover the cost of subsidies in band A.
Based on his explanation, this will serve as a reimbursement for the gasoline and diesel that customers are currently utilizing.
He pointed out that what consumers
spend now is cheaper compared to fuel
and diesel, even with the increase in
electricity tariffs.
“We are still about the cheapest, even in
sub-Saharan Africa, despite the tariff.
Our neighbouring countries pay higher.
So the price isn’t comparable.
“Band A is cheaper compared to other
sources of generating power. It is almost
50 per cent cheaper to connect to band A
of the national grid than to run on fuel
and diesel.
“So when we complain about the higher
tariff, it is cheaper for any business to pay
for a grid connection than to individually
generate power,” he said.
He assured that President Bola Tinubu’s
administration means well for Nigerians
and would not aggravate an already bad
situation in the country.
“We are out to make things better for
Nigeria and to create industrial
development through our local
manufacturing, and energy is needed to
do this,” he said.
The minister explained that the increase
in tariffs was not targeted at making life
difficult for Nigerians but at making life
affordable for the people.
