Business
Power Minister, Adelabu apologises for saying Nigerians keep freezers on due to low tariff
…says FG still paying subsidy
Adebayo Adelabu, the Minister of Power, has apologised to Nigerians for saying that they keep freezers on for days due to low electricity tariff.
He had made the remark while justifying the hike electricity tariff for Band A customers from N66 to N225 per kilowatt.
The minister came under fire by many Nigerians in the last one week for his comment which was considered offensive.
But speaking on Channels TV on Thursday, the minister noted: “Anything we have said that are considered offensive, we are sorry about that.”
Adelabu had told journalists in Abuja on April 4, 2024 that Nigerians lack the culture of electricity consumption management because of “cheap” power supply, adding that NERC’s decision to order the upward review of electricity tariffs is not illegal.
Adelabu argued that reviewing electricity tariff was the exclusive responsibility of NERC, noting that the Electricity Act 2023 gives NERC the right to carry out a review twice in a year. The minister, who stated this on Politics Today, a Channels TV programme, explained that once the distribution companies and customers were carried along, it was within the legal system to carry out a re-examination of tariffs.
The minister also said the decision to reduce the subsidy paid for electricity by the Federal Government was arrived at due to the huge amount of money that it would gulp in the 2024 Budget, adding that government could not afford to pay N3 trillion for subsidy in the power sector alone when the total budget for 2024 was N28 trillion.
FG still paying electricity subsidy
Meanwhile, the minister said the Federal Government is still paying subsidy on electricity despite the recent hike in tariff paid by Band A customers.
According to him, the government has about N1.8trn to pay in electricity subsidy for 2024.
Adelabu said the Electricity Act, 2023 made provisions for the review of tariff twice a year.
“Review of tariff is actually legal once it is within the exclusive responsibility of the Nigerian Electricity Regulatory Commission (NERC). The Act actually provides for review twice in a year, every six months,” he said.
“If we have been paying the tariff at the same level in the last two years, it logically means that someone has been paying the burden of all these increases.
“As it is today, looking at a total production, transmission and distribution cost, the Nigerian Government is bearing 67% percent of that cost before the increase in tariff for Band A customers.
“But when you look at generation cost, the Nigerian Government is paying 90% but in terms of total subsidy, it is about 67% of subsidy on the tariff.
“Last year, it was about N720bn which was not fully funded, we have about N305bn carried into this year. If we retain tariff at the current level, the Nigerian Government will be needing about N2.9trn to subsidise electricity but with the increase for Band A customers, we are going to have a reduction of about N1.1trn. So, we are looking at about N1.8trn in subsidy.”