The Federal Government of Nigeria has announced its intention to increase electricity prices even further, News About Nigeria reports.
This announcement follows the recent approval by the Nigerian Electricity Regulatory Commission (NERC) to hike tariffs for customers in the Band A category.
The Minister of Power, Adebayo Adelabu, made the latest development known during a briefing in Abuja on Friday.
He explained that the recent tariff increase is part of a gradual process to phase out electricity subsidies in the country.
The aim, he said, is to encourage investment in the power sector.
He said, “This tariff review is in conformity with our policy thrust of maintaining a subsidised pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say, three years.
“I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost-reflective tariff or remove subsidy 100 percent in the power sector like it was done in the oil and gas sector.”
The Minister clarified that the current tariff adjustment is a trial phase, primarily targeting customers with reliable power infrastructure who already enjoy around 20 hours of electricity daily.
This initial phase aims to assess the feasibility and impact of the tariff adjustment.
He added that even with the increased tariff, Band A customers would still pay significantly less than they would for alternative energy sources like diesel, which currently costs around N500 per kilowatt-hour.
Explaining the rationale behind the move, Minister Adelabu pointed out that the government has been heavily subsidising electricity costs, covering up to 67 percent of the expenses.
This subsidy, if continued, would amount to a substantial financial burden on the government, diverting funds from other critical sectors.
The recent decision to increase tariffs for Band A customers was announced by Musliu Oseni, Vice Chairman of NERC, during a press briefing in Abuja.
Under the new tariff structure, these customers, who represent 15 percent of the country’s electricity consumers, will now pay N225 per kilowatt-hour, up from the previous N66.
