The Minister of Power, Adebayo Adelabu has said that the Federal Government is still paying subsidy on electricity despite the recent hike in tariff paid by Band A customers said to be about 1.5 million of the total 12 million consumers in the sector.
According to Adelabu, the government has about N1.8 trillion to pay in electricity subsidy for 2024.
The minister insisted that the Electricity Act, 2023 made provisions for the review of tariff twice a year.
Explaining how the government subsidize electricity, the Power Minister stated thus:
“As it is today, looking at a total production, transmission and distribution cost, the Nigerian Government is bearing 67% percent of that cost before the increase in tariff for Band A customers. But when you look at generation cost, the Nigerian Government is paying 90% but in terms of total subsidy, it is about 67% of subsidy on the tariff.
“Last year, it was about N720 billion which was not fully funded, we have about N305 billion carried into this year. If we retain tariff at the current level, the Nigerian Government will be needing about N2.9 trillion to subsidise electricity but with the increase for Band A customers, we are going to have a reduction of about N1.1 trillion. So, we are looking at about N1.8 trillion in subsidy”