…as minister says current tariff unsustainable for govt
The Federal government has applauded its move in ensuring tariff increase for Band A customers, stating that due to its transformative tariff reforms, the market has generated an additional N700 billion in revenue, reflecting a 70 percent increase.
Adebayo Adelabu, the minister of power stated this during the ministerial press briefing in Abuja on Thursday. According to him, this saw the market revenue for 2024 rising from N1 trillion in 2023 to N1.7 trillion.
He also explained that this move has led to the reduction of the government-subsidised tariff shortfall by 35 percent, from N3 trillion to N1.9 trillion.
“It is evident that, due to our transformative tariff reforms, the market has generated an additional N700 billion in revenue, reflecting a 70% increase. This results from the cost-reflective tariff adjustment for Band A customers.
“This demonstrates that financial viability and service delivery can coexist harmoniously,” he said.
Read also: Band A customers decry DisCos extortion amid poor supply
The minister speaking further, noted the outstanding debts to the Power Generation companies in the form of unpaid government subsidies totalling N4 trillion as of December 2024, adding that N1.94 trillion is the unpaid subsidy for the year 2024 alone, which is now about N200 million monthly.
He explained that while the government recognises the concerns of electricity consumers, maintaining the current tariff structure for other electricity customers was unsustainable for both the government and the sector’s long-term viability.
He stressed that the current subsidy regime significantly strains public resources that could be invested in improving service delivery and infrastructure. “We are committed to working transparently with all stakeholders to implement necessary adjustments that balance affordability with the financial sustainability required to provide reliable power for all Nigerians.”
Speaking on the plans to settle the outstanding debts, the minister said, “there are plans underway to make these payments, while I would not say it will be paid 100 percent, we will be paying it back gradually. And the mode of payment, we have some projections which will facilitate cash payments. While we are also discussing with the generating companies to give them some guaranteed debt instruments, like the promissory notes, which we will give to them to pay back some of these debts.
“These promissory notes will be liquid enough for them to be taken to the banks for discounting the need in the case of cash injection. So it is a combination of cash payments and promissory notes. And I can tell you that between now and the end of the year, we are going to be close to N2 trillion out of this.
“It was a hard discussion with the Minister of Finance and the coordinating Minister of the Economy, who has promised that they are working on the promissory notes and once we have budget releases, cash payments will also be made.”
