The Federal Government’s proposal to adjust electricity tariffs in an effort to improve liquidity in the Nigerian Electricity Supply Industry has met with significant backlash from consumers and members of the Organised Private Sector. The plan aims to align tariffs for customers in Bands B and C with the N206 per kilowatt-hour rate currently charged to Band A customers, who represent about 15% of the 12.82 million electricity consumers in Nigeria.
This initiative comes as the government acknowledges a staggering debt of over N4 trillion owed to 24 power generation companies and 11 electricity distribution companies in subsidy payments. Minister of Power Adebayo Adelabu disclosed this information during the public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan in Abuja.
The Nigerian electricity sector has faced a series of reforms perceived as detrimental to consumers, particularly following the government’s commitment to a cost-reflective tariff system. Just weeks ago, the Special Adviser to President Bola Tinubu on Energy indicated that current power tariffs could rise by about two-thirds.
Adelabu stated that the slow transition of customers to Band A tariffs is due to a lack of investment from distribution companies. He called for a restructuring of the tariff bands to reduce the existing disparities, arguing that the differences are unfair and must be addressed.
Under the current system, Band B customers, who receive 18 to 17 hours of electricity supply, pay N63 per kilowatt-hour, while Band A customers, who enjoy only two additional hours, pay N209 per kilowatt-hour. Adelabu emphasized the necessity of regularizing tariffs to create a fairer pricing model.
Consumers have voiced their concerns through the All Electricity Consumers Forum, insisting that any tariff increase is insensitive given the ongoing instability in electricity supply. National Coordinator Adeola Samuel-Ilori criticized the government’s approach, stating that the current infrastructure is inadequate for reliable power generation.
Segun Kuti-George, the National Vice President of the Nigerian Association of Small-Scale Industrialists, echoed these sentiments, expressing frustration over the government’s lack of responsiveness to the challenges facing citizens. He called for alternative power sources, highlighting that frequent outages continue to plague the sector.
Dr. Ikenna Nwosu from the Nigerian Economic Summit Group criticized past tariff hikes as unjustified, stating that the proposed increase would exacerbate the financial burdens on individuals and businesses already grappling with high living costs.
As discussions around the proposed electricity tariff adjustments continue, the tension between government policies and consumer needs remains a critical issue in the ongoing quest for a sustainable power sector in Nigeria.
