In a recent interview on Channels Television’s Politics, Minister of Power, Adebayo Adelabu, shed light on the dynamics of electricity tariffs in Nigeria. He highlighted that the N225 per kilowatt-hour (kWh) currently paid by Band A electricity consumers could decrease if the exchange rate improves to below N1,000 to a dollar.
The discussion arose amidst the Federal Government’s decision to halt subsidy payments for Band A electricity consumers, announced through the Nigerian Electricity Regulatory Commission on April 3. This move resulted in Band A customers now paying N255/kWh, up from the previous N68/kWh, while other tariff brackets maintained their existing rates.
Explaining the concept of a kilowatt-hour, Minister Adelabu clarified that it represents the energy consumption equivalent to running a 1,000-watt appliance continuously for one hour. For instance, a 100-watt light bulb running for 10 hours would consume 1 kWh of energy.
Minister Adelabu defended the current tariff structure, asserting that it remains competitive compared to the expenses incurred by consumers on alternative energy sources such as fuel. He emphasized the flexibility of the tariff, indicating that a reduction in the exchange rate could trigger a decrease in tariffs, even for Band A customers, bringing it below the current N225/kWh.
Addressing the complexity of the power sector’s challenges, Minister Adelabu acknowledged that they stem from decades of neglect and underinvestment, suggesting that a quick resolution is unlikely. He emphasized the government’s commitment to gradual but consistent progress in tackling these issues.
Looking ahead, Minister Adelabu outlined plans to elevate customers in lower tariff bands to Band A status as power generation capacity improves over the next six months. This strategic move aims to ensure broader access to affordable electricity as the sector undergoes transformational changes.
Meanwhile, the recent electricity tariff adjustments have sparked criticism directed at the administration of President Bola Tinubu. Various groups and individuals have called for a reversal of the decision, reflecting broader public sentiment concerning the affordability and accessibility of electricity services in Nigeria.
