The Federal Government has disclosed that plans are in the offing to regularise electricity tariffs as part of efforts to address disparities in the current billing system as well as encourage investment in the power sector.
He said the government is considering this option over the slow pace of migration to Band A customers, which he attributed to the reluctance of Distribution Companies to make the necessary investments.
Under the current structure, customers in Band B, who enjoy 18 to 17 hours of electricity supply, pay N63 per kilowatt-hour, while those in Band A, with up to 20 hours of supply, are charged N209 per kilowatt-hour.
Speaking at the ongoing public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja, the Minister of Power, Adebayo Adelabu, described the billing as “unfair” and stressed the need for a regularisation of the tariffs to create a more balanced and 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,” he stated.
Adelabu said the ministry will see how it can improve upon its modest achievements of the previous year, not only to ensure that the sector grows, but also to ensure that more investments can be made to revamp all dilapidated infrastructure.
“The migration to Band A should have been faster, but we found out that the DisCos refuse to invest. They have refused to invest in this sector.
“A lot of investment is required for us to achieve an accelerated migration of lower-band customers into Band A. It is taking a lot of time,” the minister stated.
He said that in response to this, the government is considering restructuring the tariff bands, reducing the current wide gap between them, and that a new system, proposed to encompass Bands A, B, and C, would address these inequalities.
“The gap between the Band A tariffs and Bands B, C, D, and E is just too wide. We believe it’s not fair. It is not just, and we must be able to carry out some level of regularisation,” Adelabu added.
He reiterated the government’s commitment to reviewing the existing tariff structure, but clarified that the review does not imply an imminent increase in rates.
