Two days after the Nigerian Electricity Regulatory Commission (NERC) approved increase of electricity tariff for customers under the Band A classification, the Federal Government has hinted that a similar measure would be extended to others.
Speaking at a briefing in Abuja on Friday, Minister of Power, Adebayo Adelabu, said the recent increase in electricity tariff is a pilot in phasing out of electricity subsidy in the country. He said the government plans to remove all subsidies in the sector to allow the thriving of investment in the power sector.
The Minister said the tariff review was in conformity with the policy thrust of maintaining a subsidized 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 at least three years.
The Minister admitted he had mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of the people that the country will not 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.
Adelabu said the government is not ready to aggravate the sufferings any longer hence, the decision to make it m a journey rather than a destination while the journey starts from now on.
The Minister said the government has commenced a gradual migration from the subsidy regime to a full cost reflective regime and must start with some customers.
According to him, this is more like a pilot for the Ministry of Power and its agencies adding that 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 added that the N225 kilowatt per hour Band A customers are charged as little in relative to the N500 they pay for alternative energy like diesel and others.
While explaining that Nigeria is experiencing a subsidy pricing regime where the government provides a large portion of the generation, transmission and distribution cost, he said the government was formerly subsidising 67 percent of the cost of electricity.
