FG Expects The Increase In Energy Tariffs To Save N1.5 Trillion

THE Federal Government has increased the amount it will save to N1.5 trillion in 2024 as a result of the recent increase in Band A consumers' power rates.

It further stated that in an effort to close the metering gap nationwide and guarantee that customers pay the correct amount for power, roughly 2.5 million meters would be placed in the same year.

According to recent remarks made by Bayo Onanuga, Special Advisor to the President on Information and Strategy, the government of Nigeria stands to save almost N1.1 trillion a year by eliminating electricity subsidies from fifteen percent of power users.

Onanuga stated that with its allocation of N450 billion for energy subsidies in 2024, the administration led by President Bola Tinubu was ready to approve the increase in electricity prices.

However, the government disclosed it would save N1.5 trillion with the most recent price adjustment, according to a paper on tariff-related problems released by the Federal Ministry of Power on Wednesday, April 10.

It stated, “FG (Federal Government) to save N1.5 trillion with tariff adjustment. FG still subsidising Bands below A. Pricing change will help improve liquidity to the NESI (Nigeria Electricity Supply Industry).

“Discos (power distribution companies) will be sanctioned for supplying less than 20 hours to Band A consumers.”

Through the Nigeria Electricity Regulatory Commission (NERC), the Federal Government announced the rise in the price of energy in Abuja. Those who were affected would now pay N225 per kilowatt-hour, up from the previous cost of N68/kWh, or a roughly 240 percent increase.

It added that Band A consumers would have access to power for up to 20 hours every day and that the decision would go into effect on April 3, 2024. Nonetheless, there were a number of people who opposed the tariff rise.

According to the Ministry of Power, the Federal Government aims to meter roughly 2.5 million unmetered power users nationwide each year.

“The Presidential Meter Initiative aims to install a minimum of 2-2.5 million meters yearly within the next five years,” it stated.

NERC's September 2023 report showed that just 5,707,838 of Nigeria's 12,825,005 registered electricity consumers had meters, meaning that over 7.1 million registered customers were still using the estimated billing method.

The Presidential Metering Initiative, unveiled by Minister of Power Adebayo Adelabu, was formed by the Federal Government to bridge this disparity.

Adelabu estimated that there was a metering deficiency of approximately eight million, but emphasized that the Federal Government was determined to fill the gap through the new program in three to five years, and to eliminate anticipated billing by the end of 2024.

“Citizens are tired of estimated billing because it always leads to cheating between consumers, staff and company. Before the end of this year, we are looking at the possibility of ending estimated billing because we want transparency and objectivity in our billing system.

“We have up to eight million metering gap in Nigeria and what the initiative seeks to achieve is to close this gap within three to five years. This means that an average of two million meters are required on a yearly basis and achieving the target is compulsory for citizens to enjoy stable power supply,” the minister said.