FG may implement electricity tariff hike, subsidise vulnerable citizens

Nigeria is currently reviewing cost reflective tariff in the power sector, a development that may see increase in end-user even as the Federal Government said subsidy would be paid for vulnerable citizens.

While Nigerian Electricity Regulatory Commission (NERC) said there wouldn’t be increase in tariff starting January 1, 2024, the Minister of Power, Adebayo Adelabu, who admitted that the country needs cost reflective tariff noted that the Federal Government is working on implementing the plan.

Recall that the Federal Government had delayed the plan from July last year, there were indications from the distribution companies that the increase was imminent nationwide. This comes amid about N350 billion subsidy budget for electricity in the 2024 appropriations.

Amid rising vandalism of critical electricity infrastructure and energy theft, Adelabu said in a new year message that the country would deploy more renewable energy this year to address electricity challenges in the country.

“Our primary focus is enhancing distribution and transmission infrastructure to minimise technical and commercial losses. The lack of liquidity continues to be a significant challenge in the electricity market.

“We are currently reviewing the implementation process of a cost reflective tariff, while government will continue to subsidize power supply to those that are vulnerable in our society,” Adelabu said.

According to him, closing the meter gap is imperative, and ongoing initiatives, including World Bank programmes and the Presidential Metering Initiatives, will gain momentum.He said the Power Ministry will intervene in distribution infrastructure, supplying transformers to communities without burdening citizens financially.

Adelabu said the Federal Government would prioritize and enhance the country’s electricity supply. Adelabu, while expressing gratitude for the dedicated efforts of the Ministry, various agencies, and Distribution Companies (DISCOs), which collectively worked to improve power supply, said there a need to augmenting distribution and transmission infrastructure.

According to him, the objective is to minimize both technical and commercial losses within the power sector and addressing critical challenges that have long affected the reliability of electricity services.

Adelabu acknowledged the pervasive issue of liquidity within the electricity market, noting that the government is actively reviewing the implementation process of a cost-reflective tariff.

In doing so, Adelabu conveyed a delicate balance, where the government remains committed to subsidizing power supply for vulnerable segments of society.

Rural electrification took a prominent position in Adelabu vision, mirroring the government’s commitment to inclusivity and nationwide development.

He disclosed plan for solar-powered mini/micro grids and street lights, promising to align these efforts with local needs, fostering collaboration with DISCOs and State Electricity Boards.

Adelabu also detailed initiatives to fortify the national grid, noting that there was a need to reactivate the Presidential Power Initiative (Siemens Project) to strengthen the grid and minimize technical losses.

Additional projects, such as the Eastern and Western super grid initiatives, according to him were introduced to enhance electricity supply to demand centers across the country.

The restructuring of the Transmission Company was also highlighted by the Minister as a significant development with a short-term goal of reconstitution and a long-term vision of regional grids for effective management.

On generation, Adelabu encouraged private companies to invest further and expand into the realm of off-grid and distributed generation, highlighting the strategic deployment of solar PV plants, small hydro plants, and wind farms across the nation.