By Jemimah Wellington, JKNewsMedia Reporter
THE MINISTER of Power, Adebayo Adelabu, announced during the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan (NIRP) in Abuja that the federal government is reviewing Nigeria’s electricity tariff system to address significant disparities and create a fairer pricing structure.
He noted that currently, Band A customers, receiving a minimum of 20 hours of electricity per day, pay N209 per kilowatt-hour, while Band B customers, enjoying up to 18 hours, pay significantly less at N63 per kilowatt-hour.
Adelabu described this gap as unjust, stressing the need for a revised framework to ensure equitable billing across consumer categories.
He said the government is considering restructuring the existing classification, potentially reducing the current five-band system to just three—Bands A, B, and C.
This revision would reduce the wide gap between tariff rates, addressing concerns raised by consumers and investors alike.
Adelabu also stated that despite expectations for a swift migration of consumers from lower bands to Band A, the process has stalled due to the reluctance of Distribution Companies (DisCos) to invest in the necessary infrastructure.
He noted that the federal government had approved a tariff increase for Band A consumers in April 2024, but lower-band customers were not affected.
However, he suggested that Band B consumers might soon pay more, as their current charges do not reflect the service level they receive.
“The gap between Band A tariffs and those in Bands B, C, D, and E is too wide,” Adelabu said.
“A Band B customer enjoying 18 hours of supply pays N63, while a Band A customer with just two more hours pays N209. That is neither fair nor just. We must regularise these differences.”
He clarified that the review does not necessarily indicate an imminent tariff hike but rather an internal restructuring to balance costs and improve sector performance.
According to the minister, an equitable tariff structure would encourage investment in the power sector, ultimately improving service delivery for consumers.
The minister further highlighted the low level of investment by DisCos as a key challenge.
He argued that their reluctance to expand their distribution networks has slowed the transition of customers to higher bands, which would have otherwise generated more revenue and improved electricity supply nationwide.
He revealed that since the migration of some customers to Band A, revenue within the power sector has increased by 70 percent, rising from N1.05 trillion in 2023 to approximately N1.7 trillion.
This, he said, demonstrates the financial potential of a well-structured tariff system.
Speaking on government policy, Adelabu said President Bola Tinubu had approved the NIEP and NIRP, and the documents were expected to receive Federal Executive Council (FEC) ratification soon.
These policies outline strategies for electricity sector development, including improved generation, transmission, and distribution frameworks.
The government also reiterated its stance on electricity subsidies, stating that such financial support would no longer be sustainable in the long term.
Adelabu explained that any re-evaluation of tariffs would involve broad stakeholder consultations and would not result in a sudden or unilateral increase.
The minister further stated that the proposed restructuring aims to create a transparent and sustainable electricity market towards ensuring fair pricing while fostering investment to improve supply nationwide.
He said the government would provide further details on the timeline and implementation of the tariff review in the coming weeks.
