NIGERIA EXPECTED TO SAVE N1.5 TRILLION THROUGH ELEVATION OF ELECTRICITY TARIFFS.

The federal government has increased its projected savings for this year after the recent rise in electricity tariffs for Band A customers to N1.5 trillion. Around 2.5 million meters will also be installed this year to address the metering gap nationwide and ensure accurate billing.

On April 2, 2024, Bayo Onanuga, the special adviser to the President on Information and Strategy, announced that removing electricity subsidies from 15 percent of consumers would save the government about N1.1 trillion annually.

In a document released by the Federal Ministry of Power on Wednesday, it was revealed that the government would save N1.5 trillion with the recent tariff adjustment. The adjustment aims to improve liquidity in the Nigeria Electricity Supply Industry (NESI), with penalties for power distribution companies supplying less than 20 hours to Band A consumers.

The hike in tariffs, announced on April 3, 2024, drew opposition from manufacturers and organized labor. Subsidies were completely withdrawn from Band A consumers, representing 15 percent of total consumers, who will now pay N225 per kilowatt-hour, a 240 percent increase from the previous rate.

The power ministry aims to meter approximately 2.5 million unmetered power users annually. The Presidential Meter Initiative seeks to close the metering gap of over 7.1 million customers still under the estimated billing system. Minister of Power, Adebayo Adelabu, announced the initiative in Abuja, aiming to eliminate estimated billing by the end of 2024 and close the gap within three to five years.

Source: Techeconomy