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Electricity tariffs to drop below N225/kWh if exchange rate improves- Adelabu

Adebayo Adelabu Discusses Tariff Flexibility and Sector Transformation on Politics Today

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Adebayo Adelabu, the Minister of Power, revealed on Thursday that electricity tariffs for Band A customers could decrease from the current N225 per Kilowatt-Hour (kWh) if the exchange rate improves to below N1,000 to a dollar. Speaking on Channel Television’s Politics Today, Adelabu addressed concerns regarding electricity tariffs and outlined the government’s approach to sector transformation.

Following the Nigerian Electricity Regulatory Commission’s (NERC) announcement on April 3, subsidy on electricity consumed by Band A customers was discontinued, resulting in a tariff increase from N68/kWh to N225/kWh for this category. Adelabu defended the tariff adjustment, highlighting that even at the revised rate, electricity remains a more economical option compared to fuel expenditure.

Adelabu emphasized the flexibility of the tariff structure, indicating that changes in the exchange rate could lead to reductions in electricity tariffs, particularly for Band A customers. He underscored the government’s commitment to transparency and engagement with stakeholders in the power sector, emphasizing ongoing efforts to address variable factors influencing tariff composition.

Addressing the longstanding challenges in the power sector, Adelabu acknowledged the complex nature of the issues, attributing them to decades of neglect and underinvestment. He emphasized the need for sustained efforts over time to effect meaningful transformation, cautioning against unrealistic expectations for immediate solutions.

Despite the formidable obstacles, Adelabu expressed optimism about the sector’s trajectory, citing consistent progress and gradual improvements in power generation. He outlined plans to upgrade customers on other tariff bands to Band A status as power generation capacities increase in the coming months.

The administration of President Bola Tinubu has faced criticism over recent electricity tariff adjustments, with calls from various quarters for a reversal of the decision. However, Adelabu defended the government’s actions, asserting that tariff adjustments are essential steps towards addressing longstanding sectoral challenges and ensuring sustainable power supply for all Nigerians.

In conclusion, Adelabu reiterated the government’s commitment to sector transformation, emphasizing the importance of collaboration between stakeholders and continued engagement with the public to achieve long-term solutions in the power sector.

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