The Federal Government, announced plans to regularize electricity tariffs in a bid to eliminate discrepancies in the current billing system and attract more investment into the power sector.
Speaking at the ongoing public presentation of the National Integrated Electricity Policy and the Nigeria Integrated Resource Plan in Abuja on Thursday, the Minister of Power, Adebayo Adelabu, revealed that the government is considering a tariff overhaul due to the slow pace of migration to Band A customers.
He attributed this delay to the reluctance of Distribution Companies (DisCos) to make necessary investments.
Under the existing structure, Band B customers, who receive 17 to 18 hours of electricity supply, are charged N63 per kilowatt-hour, while Band A customers, receiving just two extra hours of supply, pay N209 per kilowatt-hour.
Adelabu called this disparity “unfair” and emphasized the need for tariff regularization to ensure a more equitable pricing system.
“We will look at the tariff again.
I am not saying that we’re going to increase the tariff before I am misquoted,” Adelabu stated.
“We are going to review it and see how we can build on our modest achievements from last year, not only to grow the sector but also to increase investments in revamping our dilapidated infrastructure,” he continued.
He acknowledged that migration to Band A should have progressed faster but explained that many DisCos had failed to make the necessary investments in the sector.
“The migration to Band A should have been quicker, but we discovered that the DisCos are refusing to invest.
A lot of investment is required to accelerate the migration of lower-band customers to Band A, and it is taking longer than expected,” Adelabu said.
In response to this challenge, the government is considering restructuring the tariff bands to narrow the significant gap between them.
A proposed new system that would cover Bands A, B, and C aims to tackle these inequities.
“The gap between the Band A tariffs and those for Bands B, C, D, and E is simply too wide,” the minister explained.
“We believe it’s unfair and unjust, and we must implement some level of regularization to address this,” the minister stated.
While confirming the government’s commitment to reviewing the existing tariff structure, Adelabu clarified that this review does not signal an imminent increase in rates.
