FG urges Nigerians to anticipate paying more for electricity

The federal government aims to eliminate all subsidies in the power sector to encourage growth and investment.

Following an announcement of a rise in electricity rates for Band A customers by the Nigerian Electricity Regulatory Commission (NERC), the Federal Government has suggested a similar fate could apply to other groups.

The Nigerian Minister of Power Adebayo Adelabu stated during a briefing in Abuja that the recent hike in electricity tariff is a trial phase towards eliminating electricity subsidies nationwide.

He suggested that the government aims to phase out all subsidies in the sector to encourage investment and growth in the power industry.

Adelabu said, , “This tariff review is in conformity with our policy thrust of maintaining a subsidised pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years.

“I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.

“We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers.

“This is more like a pilot for us at the Ministry of Power and our agencies. It is like a proof of concept that those that have the infrastructure sufficient enough to deliver stable power of enjoying 20 hours of light to be the ones to get tariff add.”

The minister also noted that Nigeria currently operates under a subsidy pricing system with the government covering 67% of the expenses for electricity generation, transmission, and distribution.