The Nigerian government plans to review electricity tariffs for customers in Bands B and C. This will align the rates more closely with the N206/kW paid by Band A customers.
At the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) event in Abuja, Power Minister Chief Adebayo Adelabu discussed the unsustainable ₦4 trillion power sector subsidy.
He said ₦2 trillion is legacy debt, while GenCos and DisCos are owed ₦1.9 trillion and ₦450 billion, respectively, for 2024 subsidies.
He claimed there is a 35% increase in power generation and distribution from 2024.
Stressing the need for financial stability to support ongoing growth, the minister said “We will look at the tariff again,” but added, “I am not saying that we’re going to increase the tariff before I am misquoted.”
Tariff Review In The Works
However he insisted that reviewing tariffs to fund infrastructure improvements and sector expansion was critical for the economy.
Mr Adelabu also criticized Distribution Companies (DisCos) for their lack of investment, which has slowed the transition of lower-band customers to Band A.
He remarked, “We are going to look at it and see how we can improve upon our modest achievement of last year, not only to ensure that we grow the sector that we need but also to ensure that we can invest more in revamping all these dilapidated infrastructures.”
“The migration to Band A should have been faster, but we found out that the DisCos refuse to invest. They have refused to invest in this sector. A lot of investment is required for us to achieve an accelerated migration of lower-band customers into Band A. It is taking a lot of time.“
This planned tariff review comes amid Nigeria’s broader economic reforms, including the removal of fuel subsidies and currency devaluation, which have all conspired to raise inflation levels.
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