The Minister of Power, Mr. Adebayo Adelabu, defended the recent hike in electricity tariffs, stating that the higher tariffs for Band A users have reduced the electricity subsidy paid by the government from about N3 trillion to N1 trillion.
He shared this information at a public hearing on electricity tariffs in Abuja, organized by the House of Representatives Joint Committee on Power, Commerce, National Planning, and Delegated Legislation.
Adelabu argued that without an increase in electricity tariffs, the expected subsidy would have been around N3 trillion. He mentioned that the Federal Government could no longer afford to bear the cost of N3 trillion in subsidies. Adelabu also pointed out that the cost of electricity is still cheaper compared to premium motor spirit and diesel, even with the increase in electricity tariff.
He added that Nigeria offers the cheapest electricity tariff in sub-Saharan Africa, stating, “We are still about the cheapest, even in sub-Saharan, despite the tariff. Our neighbouring countries pay higher. So the price isn’t comparable.”
However, Deputy Speaker of the House of Representatives Benjamin Kalu reiterated that the Nigeria Electricity Regulatory Commission’s decision to increase electricity tariffs had generated strong resistance. He emphasized that while the NERC justified the tariff hike to address mounting debt and ensure the continued functioning of the power sector, the fears expressed by the masses were valid.
Kalu expressed genuine concerns that higher utility bills resulting from this tariff hike can have ripple effects on operational costs for businesses, potentially leading to increased prices of goods and services. He also pointed out that Band A is cheaper compared to other sources of generating power, stating, “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.”
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