Naira Gains Against FX Will Force Down Electricity Tariff — Minister

Posted by African Examiner Featured, Latest Headlines, News Across Nigeria Friday, April 12th, 2024

(AFRICAN EXAMINER) – The Minister of Power, Adebayo Adelabu, with the gains by the naira against the United States dollar in the last few weeks, electricity 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,” he said.

On April 3, 2024, the Nigerian Electricity Regulatory Commission (NERC) raised electricity tariff for customers enjoying 20 hours power supply daily. Customers in this category are said to be under the Band A classification. The increase will see the customers paying N225 kilowatt per hour from the current N66, a development that has been heavily criticised by many Nigerians, considering the immediacy of the tariff hike and the current hardship in the land.

However, Adelabu said, “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.”

The minister assured Band A customers of value for their money. He also assured Nigerians that consumers on other bands won’t be shortchanged by distribution companies as the regulators won’t hesitate to wield their big stick on any of such discos.

The minister further said the government has been working on ramping up power generation from about 4,000 megawatts to 6,000 megawatts in the next six months. He said 25% of Nigeria’s power generation is from hydroelectric power while the remaining 75% is from gas plants.

The minister said “the gas that is supposed to be the raw material has not been coming in adequate proportion” but the government has been working with electricity generation companies to ramp up power generated for the benefit of Nigerians.

He said the President Bola Tinubu administration plans to decentralise power generation across states of the federation and strengthen transmission and distribution of the energy to power Nigeria’s industrial transformation.