In a move to bolster savings and tackle metering gaps, the Federal Government has unveiled ambitious plans following the recent electricity tariff hike. With projections set at a staggering N1.5 trillion in savings, coupled with the installation of 2.5 million meters, the government aims to revolutionize the energy landscape.
According to Bayo Onanuga, Special Adviser to the President on Information and Strategy, the withdrawal of electricity subsidy from 15% of consumers is expected to yield approximately N1.1 trillion in annual savings. President Bola Tinubu’s administration is steadfast in its commitment to adjusting electricity prices, given the allocated N450 billion budget for energy subsidies in 2024.
In a detailed document released by the Federal Ministry of Power, it outlined the significant impact of the tariff adjustment, emphasizing the need to improve liquidity within the Nigeria Electricity Supply Industry (NESI). Moreover, power distribution companies failing to provide a minimum of 20 hours of electricity to Band A consumers will face sanctions.
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Despite opposition from manufacturers and organized labor, the government proceeded with the tariff hike, affecting approximately 1.9 million consumers. Subsidies were completely withdrawn from Band A consumers, constituting 15% of the total power consumers nationwide.
The hike, announced by the Nigeria Electricity Regulatory Commission, sees affected consumers facing a substantial increase, from N68/kWh to N225/kWh, representing a significant 240% surge. Effective April 3, 2024, Band A customers are slated to enjoy up to 20 hours of daily power supply, albeit amidst widespread objections.
To address the pervasive issue of metering gaps, the Federal Government launched the Presidential Meter Initiative, spearheaded by Minister of Power, Adebayo Adelabu. With an estimated shortfall of eight million meters, the initiative aims to eliminate estimated billing by 2024, ensuring transparency and objectivity in the billing system.
Adelabu reiterated the government’s commitment to closing the metering gap within three to five years, targeting an installation rate of 2-2.5 million meters annually. The initiative stands as a cornerstone in ensuring citizens’ access to stable power supply and fostering trust between consumers and utility providers.
