Minister of Power Adebayo Adelabu has explained how President Bola Ahmed Tinubu stopped electricity Distribution Companies in Nigeria from implementing electricity tariff hikes.
Adelabu disclosed this on Wednesday during a press conference with Journalists in Abuja.
According to him, President Tinubu does not want Nigerians to suffer more after removing fuel subsidies and, therefore, approved electricity subsidies.
He affirmed that the distribution subsector needed a reflective tariff to boost liquidity; however, this period is not the time to implement it.
Adelabu said Tinubu insisted that cost-reflective must be backed by incremental power supply to Nigerians.
“You cannot jump overnight and implement the cost-reflective tariff. I can tell you that till today, the government still subsidises power. The tariff should have been raised months back, but Mr President said we can’t touch the tariff until we can achieve regular and incremental power supply.
“So there is a gap between the cost-reflective tariff we are supposed to charge and the allowed tariff. That huge gap the government is still handling as a subsidy. This affects liquidity in the system and investments and causes so many constraints.
“You cannot jump overnight and implement the cost-reflective tariff. I can tell you that till today, the government still subsidises power. The tariff should have been raised months back, but Mr President said we can’t touch the tariff until we can achieve regular and incremental power supply.
“So there is a gap between the cost-reflective tariff we are supposed to charge and the allowed tariff. That huge gap the government is still handling as a subsidy. This affects liquidity in the system and investments and causes so many constraints”, he stated.
Recall that the Nigerian Electricity Regulatory Commission’s second Quarter report released in October disclosed that the federal government spent N135.2 billion on electricity subsidies.
