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New Electricity Tariff Not Responsible For Hike In Prices Of Goods, Cost Of Production – Minister
Nigeria’s Minister of Power, Adebayo Adelabu, has stated that the new electricity tariff is not responsible for the increasing price of goods and services in the country as reported in the media.
According to him, the criticism surrounding the increase in electricity tariff for Band A customers is coming from individuals who previously neglected to pay their electricity bills.
Nation Post reports that Adelabu made these remarks during the 8th Africa Energy Marketplace forum held in Abuja on Thursday.
The minister stressed that the new tariff has actually resulted in a 30 to 40 per cent reduction in energy costs for consumers in this category. Adelabu also refuted the notion that the tariff hike has contributed to the increased production costs for manufacturers, which in turn has led to higher prices for goods and services.
He clarified that the objective of the electricity tariff adjustment was not to further burden Nigerians or exacerbate the existing economic challenges of high inflation and a depreciating currency but rather to alleviate the hardships faced by the people.
“Those on Band A, if they should do their arithmetic properly, to compare what they have been spending on energy provision from grid supply and energy generators put together, before the review of tariff, they have achieved nothing less than 30 to 40 per cent reduction in their total cost. That is the truth.”
“We are also electricity consumers, so we can attest to this fact. It is true that if you were in Band A, your bill would have doubled, if not more. But check out what you have been spending on your generator servicing, diesel and petroleum procurement; it would have gone down considerably.
“So the argument of this new tariff having the capacity of increasing the cost of production and raising the prices of goods and services is not logical.
“Manufacturers under Band A should have a lower Energy cost by now, thereby, reducing their cost of production. Except those that have not been paying for electricity in the past. We can also come together to compare notes with practical examples. But how this new tariff regime will increase the cost of production is not valid because I am in that industry too,” Adelabu said.
Nation Post reports that despite Nigeria’s abundance of sun, water, and gas, it has been suffering from a lack of electricity for the past 60 years.
During a recent speech, Dr. Kevin K. Kariuki, the Vice President of the African Development Bank’s Power, Energy, Climate Change, and Green Growth Complex, announced plans to provide $1 billion in support to Nigeria’s power sector.
This support will be provided through a policy-based operation (PBO) that focuses on energy and aims to assist the ongoing power sector reforms that have been initiated by the new Electricity Act.
Dr. Kariuki also mentioned that the bank will finance the policy recommendations needed to achieve the desired outcomes outlined in the National Integrated Electricity Policy and Strategic Implementation Plan.
