The Federal Government has said it is still paying subsidies on electricity despite the recent hike in tariff paid by Band A customers said to be about 1.5 million of the total 12 million consumers in the sector.
The Minister of Power, Adebayo Adelabu, made this disclosure on a Channels Television programme: “Politics Today.”
Adelabu, who featured on the programme on Thursday, said the government has about N1.8 trillion to pay in electricity subsidy for 2024.
On the claim by human rights lawyer, Femi Falana, that the increase in tariff paid by Band A consumers was illegal, the Minister said: “Review of tariff is actually legal once it is within the exclusive responsibility of the Nigerian Electricity Regulatory Commission.
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“The Act actually provides for review twice in a year, every six months.”
On claims in some quarters that the Federal Government had removed subsidy on electricity in 2022, Adelabu cited rising dollar, soaring gas price, cost of power plant, transmission and distribution infrastructure, amongst others in the last two years as making that untrue.
He said: “If we have been paying the tariff at the same level in the last two years, it logically means that someone has been paying the burden of all these increases.
“As it is today, looking at a total production, transmission and distribution cost, the Nigerian Government is bearing 67 percent of that cost before the increase in tariff for Band A customers.
“But when you look at generation cost, the Nigerian Government is paying 90 percent, but in terms of total subsidy, it is about 67 percent of subsidy on the tariff.
“Last year, it was about N720 billion, which was not fully funded.
“We have about N305 billion carried into this year.
“If we retain tariffs at the current level, the Nigerian Government will be needing about N2.9 trillion to subsidise electricity, but with the increase for Band A customers, we are going to have a reduction of about N1.1 trillion.
“So, we are looking at about N1.8 trillion in subsidies.”
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