*Electricity customers on Band A consume 75% of subsidy in the sector
*Insists move will ramp up national economy
Government Friday disclosed that it will continue to subsidie the cost of electricity supply to 75 per cent of electricity consumers in the country.
Reacting to public outcry on the 300% increase in the cost of electricity to consumers on Band A, the Minister of Information and National Orientation, Mr. Mohammed Idris Malagi and his counterpart of the Power Ministry, Engr. Adebayo Adelabu, at a Miniterial Press Briefing Friday in Abuja, stated that those currently affected by the Band A tariff increase, not only enjoy 20 to 24 hours electricity supply daily, but have been analysed to be capable of paying the new tariff.
They also added that customers on Band A have been enjoying 70% of the over N1.4 trillion subsidy paid by government for electricity supply nationwide.
The Power Minister in particular noted that President Bola Tinubu, desirous to improve power supply in the country and encourage investment that will boost the nation’s economy, had to ensure equity by approving that the 15% of electricity consumers who enjoy an almost monopoly in power supply, pay commensurate tariff, instead of over-benefitting government subsidy far above 75%of Nigerians.
“I ppeal to Nigerians to display some level of understanding with policies of this government. The President has vowed to use the power sector to drive the economy, even though it may appear to be tough in the beginning.
“We know the inflation rate is there, devaluation is there and the devaluation of the naira is also there ans government are aware of all these but the removal of subsidy is necessary pains that people will face to come out of those hardships.
“Reforms come with necessary pains but joy comes after the fixing have been achieved”.
He noted that government was subsidising 67% of the cost of generating, transmitting and distributing power in Nigeria, amounting to over N3 trillion, which he put at 10% of government total revenue.
“I assure you that aside Band A customers who are just about 1.5 milion, the remaining 10 million customers will continue to enjoy government subsidy of about 70%.
“We have also established that these 15% customers are willingness to pay for the 20 to 24 hours of electricity supply they get.
“The average cost of generating power per day of using generator is not less than N500 per hour. So, if we are putting the cost of electricity at N235, per hour, it is still less than 50% of self generation obtainable with Band A customers”.
He listed problems in the sector including gas supplies, lack of liquidity and operating cost, including obsolete or vandalised gas pipelines, obsolete transformers weak injection substations and about 15 million metering gap.
“Only 481 feeders have been identified and classified as able to feed uninterrupted power to the consumers.
He added that “in January this year, generation invoice was N240 billion, but the gencos were asked to pay only N24 billion, which is only 10% of the bill”.
Earlier, Mr. Idris reiterated that the press briefing was instituted to provide easy access for public accountability, stressing that it was part of President Bola Tinubu’s process to adequately inform the public.
The Minister said he featured Adelabu, thevMinister of Power; who came with Mrs. Olu Verheijen, Special Adviser to the President on Energy; Dr. Musiliu Oseni, Vice-Chairman of the Nigerian Electricity Regulatory Commission (NERC), other Commissioners of the NERC, stakeholders, to reiterate government’s commitment to transparency in public communication as a deliberate policy to build trust between the government and its citizens.
He noted that while misconceptions and concerns around the tariff review are understandable, he pointed out that the review is a strategic step toward a more sustainable, efficient, and equitable electricity sector.
