The recent increase in electricity tariff for Band A customers has led to the Federal Government raising its projected savings for this year to N1.5tn.
In an attempt to close the metering gap across the nation and guarantee that customers pay the correct amount for electricity, it was also announced that roughly 2.5 million meters would be installed this year.
According to Bayo Onanuga, Special Advisor to the President on Information and Strategy, the government of Nigeria would save approximately N1.1 trillion a year as a result of its decision to remove electricity subsidies from 15% of power users. This announcement was made on April 2, 2024.
Onanuga had stated that given its N450 billion budget for energy subsidies, the administration of President Bola Tinubu was prepared to approve the increase in electricity prices.
Yet, the government claimed that the most recent tariff adjustment would save N1.5tn in a document on tariff-related issues released by the Federal Ministry of Power on Wednesday. The document was made available by Bolaji Tunji’s media aide.
It said, “FG (Federal Government) to save N1.5tn 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.”
Manufacturers and organized labor protested last week against the April 3, 2024, Federal Government approval and announcement of a tariff hike that will affect approximately 1.9 million consumers.
The entire electricity subsidy was removed from the tariff for customers in the Band A category, which accounts for 15% of the nation’s 12.82 million power users.
At a press conference hosted by the Nigeria Electricity Regulatory Commission in Abuja, the government announced the increase in electricity rates. It stated that those impacted would now pay N225 per kWh, as opposed to the previous rate of N68/kWh, or a roughly 240 percent increase.
The government announced that the decision became operative on April 3, 2024, and that Band A customers would have access to power for up to 20 hours every day. Nonetheless, there were a number of people who opposed the tariff increase.
On Wednesday, the ministry of power announced that the Federal Government aimed to metered approximately 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.
Only 5,707,838 of the 12,825,005 registered electricity customers in Nigeria had meters, according to a September 2023 report from NERC. This means that over 7.1 million registered customers were still using the estimated billing system.
The Presidential Metering Initiative was launched by the Federal Government to bridge this gap, and it was revealed at a briefing in Abuja by the Minister of Power, Adebayo Adelabu.
Adelabu estimated that there was a metering shortfall of approximately eight million, but emphasized that the Federal Government was determined to close the gap through the new initiative in three to five years, and to eliminate estimated 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 had stated at a briefing in Abuja.
