A storm is brewing in Nigeria’s power sector as the Federal Government reveals plans to “regularize” electricity tariffs, sparking widespread outrage among consumers and the Organised Private Sector (OPS). The proposed hike, intended to align tariffs for Band B and C customers with the higher rates paid by Band A consumers, has been met with fierce resistance, with critics accusing the government of insensitivity and economic recklessness. Hobnob News has uncovered the details of this controversial move, which comes amid revelations of a staggering N4 trillion government debt to power generation and distribution companies.
The government’s rationale behind the tariff adjustment lies in its desire to bolster the liquidity of the Nigerian Electricity Supply Industry (NESI) and address disparities in the current billing system. Minister of Power, Adebayo Adelabu, unveiled the plan during the public presentation of the National Integrated Electricity Policy (NIEP) and Nigeria Integrated Resource Plan in Abuja. He argued that the current tariff structure, which sees Band A customers paying N206/kW while Band B and C customers pay significantly less, is “unfair” and unsustainable.
However, consumers and the OPS have vehemently rejected this argument, questioning the government’s timing and priorities. They argue that hiking tariffs amidst ongoing economic hardship and unreliable power supply is not only unjust but also counterproductive. Adeola Samuel-Ilori, the National Coordinator of the All Electricity Consumers Forum, condemned the proposal, stating that it would be “insensitive” to impose further financial burdens on citizens who are already struggling.
“Our peak generation is just 5,345 megawatts. Discos still reject loads for one reason or another. It’s purely insensitive of a ruler to think the citizens can be pummeled to a state of involuntary submission because of their passive mentality. That’s not only bad but criminal, and it can only be a government with no good intentions that will contemplate that,” Samuel-Ilori told Hobnob News.
Segun Kuti-George, the National Vice President of the Nigerian Association of Small-Scale Industrialists, echoed these sentiments, accusing the government of being “far from the reality of what is facing the country.” He lamented the lack of progress in developing alternative power sources and criticized the government’s focus on increasing tariffs rather than improving service delivery.
“Why is the government not working on providing alternative sources of power? Even the electricity we have is not regular; it still goes off for hours, and nobody has been jailed for the incessant blackouts. While we are not done with these, they are still talking on another increment, they are purely insensitive, and it does not show an innovative government,” Kuti-George stated.
Adding fuel to the fire, Minister Adelabu revealed that the Federal Government owes a colossal N4 trillion in electricity subsidies to generation and distribution companies. This debt, he argued, is crippling the sector’s ability to operate efficiently and invest in infrastructure improvements. A breakdown of the debt shows that N2 trillion is owed to Gencos as legacy debts, another N1.9 trillion as part of the 2024 electricity subsidy, and N450 billion to Discos for the 2024 subsidy.
“How do you expect the Gencos to perform optimally? How do you expect them to pay for gas, service and maintain their turbines and other infrastructure as well as pay their staff? If a total of N4tn is owed to them,” Adelabu questioned.
Dr. Ikenna Nwosu, a member of the Nigerian Economic Summit Group, argued that past tariff hikes were unjustified and that the proposed increase would only exacerbate the current economic woes. “The past hike was not justified with any published data. The new hike is, thus, not justified. It has a negative impact on persons and businesses are very humongous. It is crippling, and will simply worsen the current double crises if cost of living crises and cost of doing business crises. For a country with plenty of power sources, Nigeria should have very cheap power,” he explained.
The government’s plan to restructure the tariff bands, eliminating Bands D and E and creating a more equitable pricing system, has done little to quell the public’s anger. As the debate rages on, the future of Nigeria’s power sector hangs in the balance, with consumers and businesses bracing for potential financial hardship and the government facing mounting pressure to address the underlying issues plaguing the industry. Hobnob news will continue to follow this developing story.
