The Federal Government has revealed ambitious plans to save up to N1.5 trillion this year following the recent hike in electricity tariffs for Band A customers. Additionally, it aims to install approximately 2.5 million meters across the country to address the metering gap and ensure fair billing for consumers.
On April 2, 2024, Bayo Onanuga, the Special Adviser to the President on Information and Strategy, disclosed that the withdrawal of electricity subsidies from 15 percent of power consumers would save the government about N1.1 trillion annually. The administration, under President Bola Tinubu, is determined to implement the price adjustment given its allocated budget of N450 billion for energy subsidies in 2024.
However, according to a document from the Federal Ministry of Power shared by Bolaji Tunji, the media aide to the power minister, the government anticipates even greater savings of N1.5 trillion with the recent tariff adjustment. The adjustment is expected to enhance liquidity within the Nigeria Electricity Supply Industry (NESI), while distribution companies (Discos) will face sanctions for supplying less than 20 hours of power to Band A consumers.
Last week’s approval of the tariff hike faced opposition from manufacturers and organized labor. The hike affects approximately 1.9 million consumers, with complete withdrawal of subsidies for consumers in the Band A category, constituting about 15 percent of the total 12.82 million power consumers nationwide.
The tariff adjustment, announced by the Nigeria Electricity Regulatory Commission, entails Band A customers paying N225 per kilowatt-hour, marking a significant increase from the previous rate of N68/kWh, effective April 3, 2024. Despite the government’s assurance of up to 20 hours of daily power supply for Band A customers, opposition to the tariff increase persists.
In tandem with the tariff adjustment, the Federal Government aims to address the issue of unmetered power users by targeting the installation of 2 to 2.5 million meters annually through the Presidential Meter Initiative. This initiative, announced by Minister of Power Adebayo Adelabu, seeks to eliminate estimated billing by the end of 2024 and close the metering gap of approximately eight million within three to five years.
The drive for transparency and objectivity in billing underscores the government’s commitment to ensuring stable power supply and fair billing practices across Nigeria.
