Electricity Tariff Hike Looms for Band B Consumers, Says Minister

Nigerian electricity consumers under Band B may soon have to pay more as Adebayo Adelabu, Minister of Power, hinted at a possible tariff adjustment to bridge the wide disparity in charges across different bands.

Speaking on Thursday at the public presentation of the National Integrated Electricity Policy (NIEP) and the Nigeria Integrated Resource Plan (NIRP) in Abuja, Adelabu emphasized that the current tariff system is unfair, particularly between Bands A and B.

The federal government had, on April 3, 2024, approved a significant tariff hike for Band A customers, increasing their rate to N209 per kilowatt-hour, while consumers in Bands B to E saw no change. Band A customers enjoy a minimum of 20 hours of electricity daily, while Band B receives at least 16 hours, Band C gets 12 hours, Band D is entitled to eight hours, and Band E has only four hours per day.

However, Adelabu argued that the price difference between Bands A and B is disproportionately high, considering the mere two to four-hour gap in electricity supply. Band B customers currently pay N63 per kilowatt-hour—significantly lower than Band A customers.

“It’s just too wide. A Band B customer enjoying 17 to 18 hours pays N63 per kilowatt-hour, while a Band A customer, with just two additional hours, pays N209. That is not fair,” Adelabu remarked.

To address this imbalance, the minister proposed restructuring the classification system, potentially merging the five bands into three—Bands A, B, and C.

“We are looking at reducing the number of bands because the gap between tariffs for Band A and other bands is just too wide. There needs to be regularization to make the system more equitable,” Adelabu explained.

Despite concerns about a potential tariff hike, he reassured Nigerians that any changes would be carefully considered and that no decision had been finalized.

“We are not announcing any increase in lower band tariffs yet. If we want to do that, there will be proper engagement with stakeholders,” he assured.

The minister also took aim at electricity distribution companies (DisCos), accusing them of failing to invest in the sector, which has slowed the migration of lower-band consumers to Band A.

“They have refused to invest in this sector. Significant investment is required for us to accelerate the migration of lower-band customers to Band A, but it’s taking too long,” he said.

Despite these challenges, Adelabu highlighted a positive development: the migration of some consumers to Band A led to a 70 percent revenue increase in the power sector, from N1.05 trillion in 2023 to approximately N1.7 trillion.

In a related development, Adelabu revealed that the NIEP and NIRP documents had been approved by President Bola Tinubu and were set to be ratified by the Federal Executive Council (FEC) on Monday.

“It is a major step for us in the sector, and we are confident that at the next FEC meeting, it will receive final approval,” he stated.

Additionally, the government is reviewing its stance on electricity subsidies, with Adelabu suggesting that continued subsidy payments are no longer sustainable.

While he did not confirm an immediate tariff hike, he clarified that re-evaluating current electricity rates is imminent.