Minister hints on electricity tariff decrease when Naira exchange rate improves to N1,000/$1

Minister of Power Adebayo Adelabu has stated that the N225 per kilowatt-hour tariff for Band A electricity consumers might see a reduction should the exchange rate drop below N1,000 to a dollar.

Adelabu said this while a guest on Channels Television's Politics Today programme on Thursday, April 11, 2024.

This statement follows the recent decision by the Federal Government, executed through the Nigerian Electricity Regulatory Commission, to discontinue subsidies for Band A customers, who now face a tariff of N255/KWh, while other consumers maintain their previous rates.

Tariff decrease anticipated

Adelabu underscored that despite the tariff increase, Band A rates remain lower than fuel costs and hinted that any adjustments to tariffs would hinge on fluctuations in the exchange rate.

He said:

“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 down below the N225 kilowatt per hour that we are currently charging.”

The minister highlighted the potential for positive changes in the tariffs paid by Nigerians, attributing this to the reduction of inefficiencies among sector operators and the strengthening of the naira against the dollar.

More customers to be added to Band A

Adelabu acknowledged the enduring challenges within the power sector, emphasising that progress necessitates dedicated time and effort.

He said there are plans to elevate customers to Band A status as power generation capacity improves over the ensuing six months.

Adelabu also mentioned the government's vigorous efforts to elevate power generation from approximately 4,000 megawatts to 6,000 megawatts within the same timeframe.

Nonetheless, the recent increase in electricity tariffs has triggered criticism of the administration, prompting calls for a reconsideration of the decision.