Adebayo Adelabu, minister of power, says the current Band A tariff in Nigeria is not among the 10 most expensive in sub-Saharan Africa.
Adelabu spoke on Tuesday at a public hearing on the increase in electricity tariff organised by the house of representatives joint committees on power, commerce, national planning and economic development, and delegated legislation.
On April 3, the Nigeria Electricity Regulatory Commission (NERC) approved an increase in electricity tariff for customers under the Band A classification.
The commission said customers under the category, who receive 20 hours of electricity supply daily, would pay N225 per kilowatt (kW) — up from N66.
On May 6, NERC reduced the electricity tariff to N206.80 per kW.
The tariff increase was met with pushback from the Nigeria Labour Congress (NLC).
However, on June 10, the Nigeria Governors’ Forum (NGF) asked the federal government to gradually phase out payment of electricity subsidies, describing it as “ineffective”.
According to Adelabu, N1.73 billion is projected to be saved by the federal government from the increase in the Band A tariff.
The minister said despite the hike, the Band A tariff is “not among the top 10 most expensive tariff in Sub-Saharan Africa”.
Adelabu said the investment will not come into the power sector if the pricing framework is not bankable, adding that the “huge obligations incurred” by the federal government through tariff shortfalls can be channelled to other segments of the economy.
He said tariffs will always be cost-reflective because the federal government can no longer afford subsidising electricity at the current rate.
The minister said the increase in electricity tariff is not targeted at making life difficult for Nigerians.
“Despite the significant hike in end-user tariffs, the grid remains the most cost-effective electricity source among the analysed options,” he said
“When we look at the average cost of generating electricity on our homes, businesses, industries it is actually cheaper with the increase in tariff than what we use to have because most (customers) that are enjoying more stable supply of electricity spend less on alternative source of electricity which is from fuel or diesel power generator. That has been the case in the past two month for those that are in Band A.”
Adelabu said the increase in tariff is making the DisCos increasingly responsive by fixing their infrastructures to migrate more customers to Band A.
“The DisCos are getting more and more responsive by the day by ensuring that they now pay much attention to upgrading and enhancing their infrastructures. On daily basis, they are migrating more customers to Band A and we have been seeing positive feedback from consumers as they now have more stable electricity even though more expensive,” the minister said.
ORGANISED LABOUR SHUNS HEARING
The committee frowned at NLC for shunning the invitation of the committee to attend the hearing.
The lawmakers said the organised labour was “quick” to protest and shut down the national grid over the increase in tariff but failed to attend the crucial public hearing.
Ademorin Kuye, a member of the committee, said the public hearing was widely advertised but NLC declined to attend the hearing because its members are attending the International Labour Organisation (ILO) convention in Geneva, Switzerland.
“When this tariff was increased NLC protested and grounded activities,” Kuye said.
Victor Nwokolo, chairman of the committee on power, also condemned the absence of organised labour.
“It is disheartening to say. They were quick to shut down national grid but can’t present their position,” he said.
Ben Kalu, the deputy speaker of the house, who represented Tajudeen Abbas, his principal, said he “expected that the NLC, who was the first to take action” on the tariff hike, to attend the hearing.
“As have been observed by various respected colleagues and condemned by members of this committee, the chair, the national assembly condemns equally the inability of the of the Nigerian Labour Congress to attend this all important public hearing,” he said.
“The parliament remains the people’s house. If there are issues to ventilate, the parliament remains the best place to air your view that is unbiased. The view that is not used to scandalise, view that is balanced, a view that is people-oriented. Such views can be adjudged so only when they pass through the pruning of the parliament.”
Kalu said NLC “will take correction,” adding that the house should continue to partner with them.
The lawmaker suggested the minister should ask the NLC to submit the group’s memoranda.
