The Nigerian Federal Government has disclosed that the recent increase in electricity tariff for Band A customers to N1.5 trillion is expected to lead to significant savings this year. Alongside this adjustment, the FGN stated that plans are in place to install approximately 2.5 million meters to address the metering gap nationwide, ensuring accurate billing for consumers.
According to Bayo Onanuga, the Special Adviser to the President on Information and Strategy, on April 2, 2024, withdrawing electricity subsidy from 15% of power consumers would result in an annual government saving of about N1.1 trillion. Despite the government’s budget of N450 billion for energy subsidies in 2024, he revealed that the decision to permit the electricity price hike aligns with this strategy.
A document from the Federal Ministry of Power, shared by the media aide to the power minister, Bolaji Tunji, indicated that the recent tariff adjustment would lead to savings of N1.5 trillion. The adjustment aims to enhance liquidity in the Nigeria Electricity Supply Industry (NESI), with penalties for power distribution companies providing less than 20 hours of supply to Band A consumers.
The tariff hike announced by the Nigeria Electricity Regulatory Commission on April 3, 2024, received opposition from manufacturers and organized labor. The increase, which affects about 1.9 million consumers, eliminates electricity subsidy for Band A customers, who make up 15% of the total 12.82 million power consumers nationwide.
In response to the metering gap highlighted in a September 2023 report by NERC, the Federal Government initiated the Presidential Metering Initiative. Minister of Power, Adebayo Adelabu, announced this initiative in Abuja, aiming to install 2-2.5 million meters annually over the next five years. With only 5,707,838 out of 12,825,005 registered electricity customers having meters, the government is committed to ending estimated billing by the end of 2024 and closing the metering gap within three to five years.
