Tinubu halts electricity tariff hike, subsidy continues says Minister
President Bola Tinubu intervened to halt an electricity tariff increase and insisted on nationwide power consumption subsidies, revealed Adebayo Adelabu, the Minister of Power.
Adelabu announced the government’s intent to scrutinise the five-year licence extension granted to privatised power distribution and generation companies, which would have expired on October 31, 2023.
Speaking at a press conference held in Abuja on Wednesday, the minister used the opportunity to read out the riot act, promising to dismiss any underperforming chief executives within the ministry.
He said, “The power sector is an industry that is very sensitive to any leader. You cannot jump overnight and implement the cost-reflective tariff. I can tell you that, until today the government still subsidises power. The tariff should have been raised months back, but Mr President said until we are able to achieve regular and incremental power supply we can’t touch the tariff.
So there is a gap between the cost-reflective tariff that we are supposed to charge and the allowed tariff. That huge gap the government is still handling as subsidy. This affects liquidity in the system, investments and causes so many constraints.
He clarified that currently, 75 to 80 percent of Nigeria’s power is sourced from gas power plants, and their primary input is gas. Consequently, when the exchange rate rises, the cost of gas also increases, impacting the tariff.
In response to inquiries about the power supply to Niger Republic, the minister clarified that such activities have not yet commenced and that the federal government is awaiting a formal request before resuming supply.
