In a surprising and proactive move, President Bola Tinubu has taken steps to prevent an imminent increase in electricity tariffs, advocating for the continued subsidization of nationwide power consumption. These developments came to light during a press briefing held in Abuja, where Minister of Power, Adebayo Adelabu, addressed the nation.
Adelabu not only disclosed President Tinubu’s commitment to maintaining the current electricity rates but also revealed the government’s intention to scrutinize the legality of the five-year license extension granted to privatized power distribution and generation companies. It was stressed that these companies should have seen their operating licenses expire on October 31, 2023.
Furthermore, Adelabu expressed his unwavering dedication to improving the performance of the power ministry’s agencies, making it clear that any underperforming chief executive could face dismissal if their actions jeopardize his position as the minister.
The issue of a cost-reflective tariff, which could potentially result in increased power costs for consumers, was also addressed by Adelabu. He explained the sensitivity of the power sector and the government’s ongoing subsidy efforts to bridge the gap between the actual tariff and the allowable tariff. The focus remains on maintaining the current electricity rates until there is a consistent and incremental enhancement in power supply, according to President Tinubu’s directive.
Adelabu acknowledged the challenges posed by the existing gap, including its impact on liquidity, investments, and constraints within the power sector. He clarified that the government views this gap as a subsidy, preventing an immediate tariff increase to avoid imposing additional burdens on the Nigerian population.
The minister outlined the various factors contributing to the potential tariff hike, with the cost of gas being a significant one, accounting for 75 to 80 per cent of Nigeria’s power generation. Adelabu emphasized the importance of careful consideration, public sensitization, and effective communication before implementing any tariff adjustments.
Adelabu also turned his attention to the power generation capacity issue, labelling the current 4,000 megawatts as “shameful and unacceptable.” He committed to increasing this capacity and highlighted the crucial role of performance within the ministry and its associated agencies.
While admitting the perceived mistakes in the 2013 privatization of the power sector, Adelabu suggested the possibility of the government reassuming control of power distribution companies and revising their territorial coverage. He emphasized the need to prioritize national interests and called for support for his vision to align with President Tinubu’s goals in the power sector.