The Minister said if the government has been paying the
tariff at the same level in the last two years, it logically means that someone
has been paying the burden of the increases.
He said looking at the total production, transmission, and
distribution cost, the Nigerian government bears 67 per cent of that cost
before the increase in tariff for Band A customers.
He explained that the government pays 90 per cent but in
terms of the total subsidy, about 67 per cent of the tariff, considering
generation cost.
According to him, last year, it was about N720 billion,
which was not fully funded, adding that the government has about N305 billion
carried into this year, noting that if it retains tariff at the current level,
about N2.9 trillion would be needed to subsidise electricity.
With the increase for Band A customers, he explained that
the government will have a reduction of about N1.1 trillion, that is about N1.8
trillion in subsidy.
Adelabu explained that the fact that the tariff for Band A,
15 per cent of the total consumers, would increase by over 200 per cent does
not necessarily translate into a 200 per cent increase in their electricity
bill if they manage their power consumption.
He assured Band A customers of value for their money and
that consumers on other bands would not be shortchanged by distribution
companies as the regulators would not hesitate to wield their big stick on any
of such discos.
He said the government has shifted its attention on discos
inefficiently run and will not hold back in taking the appropriate steps in the
interest of consumers, pointing out that by cutting down the inefficiencies of
some operators in the sector, couple with the gains by the naira against the
dollar in the last few weeks, tariff paid by Nigerians should moderate
positively.
He said the tariff is flexible, explaining that if the naira
does better in the forex market, the tariff may fall below the current N225 per
kilowatt-hour.
The minister further explained that the government has been
working on ramping up power generation from about 4,000 megawatts to 6,000
megawatts in the next six months, saying 25 per cent of Nigeria’s power
generation is from hydroelectric power while the remaining 75 per cent is from
gas plants.
He assured that President Bola Tinubu administration plans
to decentralise power generation across states of the federation and strengthen
transmission and distribution of energy to power Nigeria’s industrial
transformation.
