Adelabu: New Tariff Lowers Energy Costs for Band A Consumers

By Olaide Ajibola, JKNMedia Reporter

ELECTRICITY CONSUMERS in Band A have experienced a significant reduction in operating costs despite the recent tariff increase, according to Nigeria’s Minister of Power, Adebayo Adelabu.

Speaking at the 8th Africa Energy Marketplace forum in Abuja, Adelabu emphasized that the new tariff structure has led to a 30-40 percent decrease in energy costs for Band A consumers, countering claims that the higher tariffs have raised production expenses.

Adelabu addressed concerns about the tariff hike, stating that the criticisms predominantly come from individuals who previously avoided paying their electricity bills.

He argued that the consistent electricity supply under the new tariff system is more cost-effective compared to the expenses incurred from using gas and diesel generators. “The electricity tariff was not designed to impoverish Nigerians or exacerbate the economic challenges of high inflation and a devalued naira,” he explained. “Rather, it aims to alleviate the people’s hardship.”

He detailed that those in Band A, upon proper calculation, would find their overall energy expenses—including grid supply and generator costs—have significantly decreased since the tariff revision.

“We, as electricity consumers, can confirm this reduction. While bills for Band A users might have doubled, the savings on generator maintenance, diesel, and petroleum have reduced overall costs considerably.”

Adelabu refuted the notion that the new tariff would drive up production costs and prices of goods and services.

“Manufacturers in Band A should now benefit from lower energy costs, thereby reducing their production expenses,” he asserted. “The idea that this tariff regime will increase production costs is not logical, as our industry data suggests otherwise.”

Highlighting Nigeria’s abundant natural resources such as sun, water, and gas, Adelabu lamented the country’s prolonged struggle with electricity provision over the past 60 years.

At the same forum, Dr. Kevin K. Kariuki, Vice President of Power, Energy, Climate Change, and Green Growth Complex at the African Development Bank (AFDB), announced a $1 billion support fund for Nigeria’s power sector.

This fund, part of a policy-based operation (PBO) with a substantial energy component, aims to support the ongoing power sector reforms initiated by the new Electricity Act. Kariuki noted that the bank would finance the policy recommendations to achieve the desired outcomes from the National Integrated Electricity Policy and Strategic Implementation Plan.

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