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Minister of Power, Adebayo Adelabu has said the Naira continuing to appreciate against the Dollar is the only condition for electricity tariff to drop in the country.
The Minister of Power made these known when he featured as a guest on Channels Television’s Politics Today programme on Thursday.
According to the Adelabu, the Federal Government is still paying subsidy on electricity despite the recent hike in tariff paid by Band A customers.
He insisted that the Electricity Act, 2023 made provisions for the review of tariff twice a year.
Adelabu said by cutting down the inefficiencies of some operators in the sector, couple with the gains by the naira against the dollar in the last few weeks, tariff paid by Nigerians should moderate positively.
“The tariff is flexible and I can tell you that even if naira gains more and the exchange rate comes down below N1,000, it must positively affect the tariff and the tariff even for the Band A will come to down below the N225 kilowatt per hour that we are currently charging.
“The fact that the tariff for Band A, which is 15% of the total consumers will increase by over 200%, does not necessarily translate into 200% increase in their electricity bill if power is properly managed in terms of consumption.
“As it is today, looking at a total production, transmission and distribution cost, the Nigerian Government is bearing 67% percent of that cost before the increase in tariff for Band A customers. But when you look at generation cost, the Nigerian Government is paying 90% but in terms of total subsidy, it is about 67% of subsidy on the tariff.
“Last year, it was about N720bn which was not fully funded, we have about N305bn carried into this year. If we retain tariff at the current level, the Nigerian Government will be needing about N2.9trn to subsidise electricity but with the increase for Band A customers, we are going to have a reduction of about N1.1trn. So, we are looking at about N1.8trn in subsidy,” the Minister said.
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