The Federal Government has announced plans to review electricity tariffs to address disparities in the current billing system and encourage investment in the power sector.
The Minister of Power, Adebayo Adelabu, disclosed this at the ongoing public presentation of the National Integrated Electricity Policy and Nigeria Integrated Resource Plan on Thursday in Abuja.
Adelabu explained that the government is considering this move due to the slow migration of customers to Band A, a situation he attributed to the reluctance of Distribution Companies to make necessary investments in power infrastructure.
Currently, Band B customers, who receive between 17 and 18 hours of electricity daily, pay N63 per kilowatt-hour, while Band A customers, who get just two extra hours, are charged N209 per kilowatt-hour.
The minister described this pricing disparity as “unfair” and emphasized the need for a tariff adjustment to create a more balanced and equitable system.
“We will look at the tariff again. I am not saying that we’re going to increase the tariff before I am misquoted,” Adelabu clarified.
“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,” he noted.
He criticized DisCos for failing to invest in the power sector, which he said has slowed down the transition of lower-band customers to Band A.
“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,” he stressed.
As part of efforts to bridge this gap, the government is considering a tariff restructuring that would reduce the wide disparity between Bands A, B, and C while ensuring fair pricing for all electricity consumers.
“The gap between the Band A tariffs and Bands B, C, D, and E is just too wide,” Adelabu noted, saying “We believe it’s not fair. It is not just, and we must be able to carry out some level of regularization.”
While reaffirming the government’s commitment to reviewing the tariff system, Adelabu stressed that the review does not necessarily mean an immediate hike in electricity rates.
