75% Consumers To Continue Enjoying Electricity Subsidy – Federal Gov’t

The Federal Government says it will continue to subsidise the cost of electricity supply to 75 per cent of electricity consumers in the country.

The assurance followed the public outcry that greeted recent 300 per cent increment in the cost of electricity to consumers on Band A.

Minister of Power, Adebayo Adelabu, stated this during the ministerial press briefing organised by the Ministry of Information to highlight President Bola Tinubu’s Renewed Hope Agenda for the power sector.

Adelabu said those currently affected by the Band A tariff increase will not only enjoy between 20 to 24 hours of electricity supply daily but have been analysed to be capable of paying the new tariff.

He stressed that customers on Band A had earlier been enjoying 70 per cent of the over N1.4 trillion subsidy paid by the government for electricity supply nationwide.

The minister noted that President Tinubu, desirous to improve power supply in the country and encourage investment that will boost the nation’s economy, had to ensure equity by approving that the 15 per cent of electricity consumers who enjoy an almost monopoly in power supply, pay commensurate tariff, instead of over-benefitting government subsidy far above 75 per cent of Nigerians.

“I appeal to Nigerians to display some level of understanding with policies of this government. The President has vowed to use the power sector to drive the economy, even though it may appear to be tough in the beginning.

“We know the inflation rate is there, devaluation is there and the devaluation of the naira is also there, and government is aware of all these but the removal of subsidy is necessary pains that people will face to come out of those hardships.

“Reforms come with necessary pains but joy comes after the fixing have been achieved,” Adelabu said.

He stressed that government was subsidising 67 per cent of the cost of generating, transmitting and distributing power in Nigeria, amounting to over N3 trillion, which he put at 10 per cent of government total revenue.

“I assure you that aside Band A customers who are just about 1.5 million, the remaining 10 million customers will continue to enjoy government subsidy of about 70 per cent.

“We have also established that these 15 per cent customers are willing to pay for the 20 to 24 hours of electricity supply they get.

“The average cost of generating power per day of using generator is not less than N500 per hour. So, if we are putting the cost of electricity at N235, per hour, it is still less than 50 per cent of self generation obtainable with Band A customers”.

He listed problems in the sector including gas supplies, lack of liquidity and operating cost, including obsolete or vandalised gas pipelines, obsolete transformers weak injection substations and about 15 million metering gap.

“Only 481 feeders have been identified and classified as able to feed uninterrupted power to the consumers,” Adelabu said.

He added that “in January this year, generation invoice was N240 billion, but the GenCos were asked to pay only N24 billion, which is only 10 per cent of the bill.”

On his part, the minister of Information and National Orientation, Muhammed Idris said that the briefing was organised to provide easy access for public accountability, stressing that it was part of President Tinubu’s process to adequately inform the public.

The Minister said he featured the Minister of Power; who came with Mrs. Olu Verheijen, the Special Adviser to the President on Energy; Dr. Musiliu Oseni, Vice-Chairman of the Nigerian Electricity Regulatory Commission (NERC), other Commissioners of the NERC as well as stakeholders, to reiterate government’s commitment to transparency in public communication as a deliberate policy to build trust between the government and the citizens.

Idris noted that while misconceptions and concerns around the tariff review are understandable, he pointed out that the review was a strategic step towards a more sustainable, efficient, and equitable electricity sector.