During the 8th Africa Energy Marketplace forum in Abuja, Minister of Power Adebayo Adelabu addressed complaints about the recent electricity tariff increase for Band A customers, asserting that those protesting are primarily individuals who have not been paying their electricity bills.
Adelabu emphasized that the new tariff has resulted in a 30 to 40 percent reduction in energy costs for these consumers.
He refuted claims that the new tariff has driven up production costs for manufacturers, thereby increasing the prices of goods and services.
Adelabu explained, “The electricity tariff was not intended to impoverish Nigerians or exacerbate the current economic challenges of high inflation and a depreciating naira. Instead, it aims to alleviate people’s hardships.”
He elaborated that those in Band A, upon properly calculating their expenses, would realize significant savings compared to their previous combined costs of grid electricity and generator fuel.
“Although Band A bills might have more than doubled, the reduction in generator servicing, diesel, and petroleum expenses would lead to an overall decrease in energy costs,” he stated.
Adelabu dismissed the notion that the new tariff regime would increase production costs, suggesting that manufacturers in Band A should now experience lower energy costs, thus reducing their production expenses.
He suggested that only those who previously did not pay for electricity would be unaffected by these savings.
He also invited stakeholders to share practical examples to substantiate his claims, reiterating that the argument of increased production costs under the new tariff is illogical given his own experience in the industry.
Furthermore, Adelabu lamented Nigeria’s persistent electricity shortages despite its abundant natural resources like sun, water, and gas, questioning why the sector has struggled for the past 60 years.
At the event, Dr. Kevin K. Kariuki, Vice President for Power, Energy, Climate Change, and Green Growth at the African Development Bank (AFDB), announced plans to support Nigeria’s power sector with $1 billion.
This support will be provided through a policy-based operation with a significant energy component, aimed at advancing power sector reforms initiated by the new Electricity Act.
Kariuki noted that the funds would be used to implement policy recommendations from the National Integrated Electricity Policy and Strategic Implementation Plan.
