Minister of Power Adebayo Adelabu Unveils Tinubu’s Decision to Stop Electricity Tariff Hike

President Bola Tinubu has put a stop to the implementation of the increase in electricity tariffs and has insisted that subsidy will be paid on power nationwide, The Minister of Power, Adebayo Adelabu, unveiled Tinubu’s decision.

The Minister said that the Federal Government would probe the legality of the five-year licence extension given to privatised power distribution and generation companies, noting that the licence for operation of the companies should have expired on October 31, 2023.

In the press briefing where he spoke with correspondents, Adelabu said he would sack any non-performing chief executive in agencies under the power ministry if their poor performance would lead to his removal as the Minister of Power.

He said,

• The power sector is an industry that is very sensitive to any leader.

• You cannot jump overnight and implement the cost-reflective tariff. I can tell you that, till today, the government still subsidises power. The tariff should have been raised months ago, but Mr President said until we can achieve regular and incremental power supply, we can’t touch the tariff.

• So there is a gap between the cost-reflective tariff that we are supposed to charge and the allowed tariff. Despite that huge gap, the government is still handling it as subsidy. This affects liquidity in the system, investments, and many other constraints.

He also added that the non-implementation was causing the liquidity crisis in the sector, but said that the President had refused to allow a raise in the electricity rate.

He said,

• Now, I never said that it was not yet time to charge a cost-reflective tariff. Rather, I said cost reflective tariff is supposed to have been implemented months ago because it is the source of liquidity to the system.

• But for political reasons and empathy, you cannot cause an additional burden on Nigerians. We just had the removal of fuel subsidy, we are talking about exchange rate skyrocketing, galloping inflation and so many others that bring hardship to the people.

• And Mr President is trying to relieve this hardship through various forms of palliatives. So it is not politically expedient and reasonable to now implement a tariff that is more like dumping the existing tariff.

• We are now paying about N70 (per kilowatt-hour), and it can never be less than N130 or N140 at the exchange rate of today if we are to implement a cost reflective tariff. Because part of the reasons for an increased tariff is the price of gas, which is paid in dollars.

He also noted that 75-80% of Nigeria’s power was generated from gas power plants “and their raw material is gas. So, once exchange rate goes up, the cost of gas also goes up and it affects the tariff.”

He also said that tariffs will be increased at a more convenient time, and before then, the public will be aware of the development.

He also said that the generation of power which settles at 4,000 megawatts was terrible, noting that measures are put in place to increase the production.

He urged senior officials of the ministry to perform or risk their jobs, as the President had told his ministers that they must perform or be fired.

He said, 

• I’m using this medium to tell my colleagues who will work with me that if your activity is not supporting my retention, you’ll leave before me. Because for me, I don’t wait to be sacked, the moment I’m not performing, I’ll leave honorably.

• But before I leave I’ll explore every opportunity to ensure I deliver, because this is not personal, this is national and national interest must prevail. So all the players in the power sector must support my vision, so that I can support Mr President’s vision.