By Milcah Tanimu
President Bola Tinubu has intervened to prevent a planned hike in electricity tariff, advocating for the continuation of subsidies on nationwide power consumption. Minister of Power, Adebayo Adelabu, disclosed this development during a press briefing in Abuja on Wednesday.
Adelabu also announced the government’s intention to investigate the legality of the five-year license extension granted to privatized power distribution and generation companies. He emphasized that the operating licenses of these firms should have expired on October 31, 2023.
During the briefing, Adelabu expressed his commitment to dismiss any underperforming chief executive within the power ministry’s agencies if their non-performance jeopardizes his position as the minister.
Addressing the issue of a cost-reflective tariff, which could result in increased power costs, Adelabu explained the sensitivity of the power sector and the government’s ongoing subsidy to bridge the gap between the actual tariff and the allowable tariff. He highlighted President Tinubu’s decision to maintain the current electricity rate until there is a consistent and incremental improvement in power supply.
Adelabu acknowledged the challenges posed by the existing gap, affecting liquidity, investments, and causing constraints in the power sector. He clarified that the government is handling this gap as a subsidy, preventing an immediate tariff increase to avoid additional burdens on Nigerians.
The minister outlined the factors contributing to the potential tariff hike, including the cost of gas, which accounts for 75 to 80 percent of Nigeria’s power generation. He emphasized the need for careful consideration, sensitization, and communication with the public before implementing any tariff adjustments.
Adelabu also addressed the power generation capacity issue, deeming the current 4,000 megawatts as shameful and unacceptable. He pledged efforts to increase this capacity and emphasized the importance of performance within the ministry and its agencies.
While admitting the perceived mistake in the 2013 privatization of the power sector, Adelabu suggested the possibility of the government reassuming control of power distribution companies and reviewing their territorial coverage. He highlighted the need for national interest and urged support for his vision to align with President Tinubu’s goals in the power sector.
