“It is Not Fair": Another Electricity Tariff Hike Looms as FG Says Other Bands Not Paying Enough

• There may be another electricity tariff increase for other bands, as the government is set to regularise prices
• Minister of Power Adebayo Adelabu listed reasons why it has become important to close the price gap
• The power sector has failed to attract investments at the pace the government expected, and DisCos are not operating optimally

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

There are signs that the federal government will soon approve an increase in electricity tariffs for other bands in the coming months.

This can be drawn from the Minister of Power, Adebayo Adelabu’s recent statement that other bands are not paying enough charges for the electricity they receive.

The minister described the price difference between Band A and other band tariffs as too wide, noting that there would be moves to regularize the prices soon.

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Speaking at the Public Presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) yesterday in Abuja, the minister questioned why Band B customers should be paying way less than half what Band A customers pay when they only get about 2 to 4 hours less electricity supply.

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The minister noted that they might soon have to resort to increasing tariffs from other bands to raise the funds the sector needs to grow since investments are not coming in.

Adelabu explained that the government expected investments to come into the sector so that other bands would be migrated to band A with them, but this was not happening as fast as they had projected.

According to a Daily Trust report, the minister explained that band B customers get about 18 hours supply while band A customers get 20 hours supply and above.

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With such little difference in supply, the gap in pricing should not be as wide as N63 and N209; hence, there is a need to regularise pricing and close the gap.

He said;

“It’s just too wide. A Band B that’s enjoying 18, 17 hours is paying N63, while one that’s enjoying just 20 hours, two hours difference of supply, is paying N209. We believe it’s not fair. It is not just. And we must be able to carry out some level of regularization so that nobody will come and say ‘downgrade me to Band B again.”

He noted that this would only close the price difference between the bands and is not necessarily an attempt to hike electricity tariffs again.

Adelabu promised that there would be proper consultations before any increase is announced, but the situation is currently under review.

The Nigerian Electricity Regulatory Commission (NERC) earlier said tariff increases will only happen every five years.

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The NERC further mandated DisCos to submit a document justifying the need for tariff increase before any approval would be given to them to increase it further.

FG clears the air on 65% hike rumours

In related news, the federal government says it spends N200 billion on electricity subsidies for Nigerians monthly.

Special Adviser to the President on Energy, Olu Verheijen, also spoke on the rumoured 65% hike in electricity tariffs, adding that the current prices are not cost-reflective and need to be reviewed.

Verheijen noted that the government is committed to working out a fair pricing plan that will not impose on the poorest Nigerians.

Source: Legit.ng