Business News

Minister eyes reduction in electricity tariff as Naira strengthens in FX market

Adebayo Adelabu, Minister of Power, has said that the revised electricity tariff for Band A customers could decrease if the Naira continues to strengthen against the Dollar in the foreign exchange market, indicating that the rates are not fixed.

The minister made this statement during an interview on Channels TV on Thursday.

He stated that the tariff is flexible, as it reflects the current economic conditions in the country, especially the exchange rate between the Naira and the Dollar in the FX market.

Adelabu also noted that the Federal Government is still paying subsidies on electricity despite the recent hike in tariff paid by Band A customers.

Adelabu emphasized that under the Electricity Act 2023, there are provisions that allow for the tariff to be reviewed twice each year.

Addressing allegations that the Federal Government eliminated electricity subsidies in 2022, Adelabu referenced several factors such as the rising Dollar value, increasing gas prices and the costs associated with power plant operations as well as transmission and distribution infrastructure over the past two years.

Nairemetrics had earlier reported that the Nigerian Electricity Regulatory Commission (NERC) increased the electricity tariff for customers under Band A category from N66/kWh to N225.

Musliu Oseni, Vice Chairman of NERC, said that these customers account for 15% of the 12 million electricity consumers in the nation.

He further stated that due to the failure to meet the necessary electricity supply hours, the commission has moved some Band A customers to Band B.