The Federal Government has announced plans to regularise electricity tariffs in a bid to address disparities in the current billing system as well as encourage investment in the power sector.
The Minister of Power, Adebayo Adelabu, made this known at the ongoing public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja.
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 only two hours more of supply, are charged N209 per kilowatt-hour.
Adelabu described this as “unfair” and stressed the need for a regularisation of the tariffs to create a more balanced and equitable pricing system.
The minister said, “We will look at the tariff again. I am not saying that we’re going to increase the tariff before I am misquoted.
“We are going to look at it and see how we can improve upon our modest achievement of last year, not only to ensure that we grow the sector that we need but also to ensure that we can invest more in revamping all these dilapidated infrastructures.”
“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.”
In response to this, the government is considering restructuring the tariff bands, reducing the current wide gap between them.
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,” he said. “We believe it’s not fair. It is not just, and we must be able to carry out some level of regularisation.”
According to him, the government is committed to reviewing the existing tariff structure, although he was quick to clarify that the review does not imply an imminent increase in rates.