Only those not paying electricity bills grumbling on new tariff hike — Minister Adelabu

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Power Minister, Adebayo Adelabu, has addressed the outcry over the recent increase in electricity tariffs for Band A customers, attributing it to individuals who previously evaded paying their electricity bills.

Speaking at the 8th Africa Energy Marketplace forum in Abuja on Thursday, Adelabu argued that the revised tariff has resulted in a 30 to 40 percent decrease in energy costs for consumers in this band.

He dismissed allegations that the new tariff has escalated production costs for manufacturers, thereby inflating the prices of goods and services.

“The objective of the electricity tariff was not to impoverish Nigerians or exacerbate the already challenging economic situation characterized by high inflation rates and a depreciating naira. Instead, it was designed to alleviate the people’s hardship,” he explained.

Adelabu further elaborated, “Band A customers, upon careful calculation of their total energy expenses from grid supply and generators prior to the tariff review, will find that they have achieved a reduction of at least 30 to 40 percent in their overall costs.”

“We, too, are electricity consumers and can vouch for this fact. It’s true that if you’re in Band A, your bill would have likely doubled, if not more. However, consider what you’ve been spending on generator maintenance, diesel, and petroleum procurement, and you’ll find it has decreased significantly.”

He refuted the notion that the new tariff could potentially increase production costs and subsequently, the prices of goods and services, labeling it as illogical.

“Manufacturers under Band A should be experiencing lower energy costs by now, thereby reducing their production costs. The only exception would be those who have not been paying for electricity in the past. We can also come together to compare notes with practical examples. But the argument that this new tariff regime will increase production costs is invalid, as I am also part of that industry.”

While acknowledging that Nigeria, with its abundance of sun, water, and gas, should not be grappling with electricity shortages, he lamented the sector’s inability to get it right over the past 60 years.

Earlier in the event, the Vice President of Power, Energy, Climate Change, and Green Growth Complex of the African Development Bank (AFDB), Dr. Kevin K. Kariuki, announced a $1bn support fund for Nigeria’s power sector.

He stated that the fund would be directed through a policy-based operation (PBO) with a significant energy component, aimed at backing the ongoing power sector reforms initiated by the new Electricity Act.

Kariuki added that the bank would finance the policy recommendations to realize the anticipated outcomes from the National Integrated Electricity Policy and Strategic Implementation Plan.

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