The Federal Government is taking steps to regularize electricity tariffs in a bid to resolve existing discrepancies in the current billing system and foster increased investment in the power sector, according to the Minister of Power, Chief Adebayo Adelabu.
Speaking at the ongoing public presentation of the National Integrated Electricity Policy and the Nigeria Integrated Resource Plan on Thursday at the Transcorp Hilton Hotel, Abuja, the event was organised by the Federal Ministry of Power, the United Kingdom Nigeria Infrastructure Advisory Facility (UKNIAF), and the UK Foreign, Commonwealth and Development Office (FCDO). It was attended by representatives from the Inter-Ministerial Power Sector Working Group, key industry stakeholders, private sector investors, donor partners, and other development agencies.
Adelabu outlined plans to address the slow progress in migrating customers to Band A, attributing the delay to Distribution Companies’ reluctance to make necessary investments.
Under the current system, customers in Band B, who receive 18 to 17 hours of electricity supply, are charged N63 per kilowatt-hour. In contrast, customers in Band A, who only receive two additional hours of supply, pay N209 per kilowatt-hour. Adelabu called this pricing structure “unfair,” emphasizing the need for a more balanced and equitable system.
“We will revisit the tariff structure,” the minister stated. “I am not saying we’re going to increase tariffs, so please don’t misquote me. Our goal is to build on last year’s modest achievements to grow the sector and invest in revamping aging infrastructure.”
Adelabu further criticized Distribution Companies (DisCos) for failing to invest in the sector, which has slowed the transition of lower-band customers to Band A. He stressed that significant investment is necessary to speed up this migration process.
“We should have seen a faster migration to Band A, but the DisCos have refused to make the required investments. It’s taking much longer than expected,” Adelabu remarked.
To address these concerns, the government is considering restructuring the tariff bands to close the significant gap between Band A and the other bands, including Bands B, C, D, and E. The new system would aim to make the tariffs fairer and more just.
“The difference between Band A tariffs and those of Bands B, C, D, and E is simply too wide. It’s not fair, and it’s not just. We must implement a level of regularisation to create a more equitable system,” the minister concluded.
