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President Tinubu halts electricity tariff hike, minister reveals subsidy decision

Minister of Power, Adebayo Adelabu, discloses President's intervention and probes power firms' license extension

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President Bola Tinubu has intervened to prevent the implementation of an electricity tariff hike, insisting on nationwide subsidies for power consumption, according to Minister of Power Adebayo Adelabu. Speaking at a press briefing in Abuja, Adelabu also revealed the government’s investigation into the legality of the five-year license extension granted to privatized power distribution and generation companies.

Adelabu emphasized the sensitivity of the power sector, citing President Tinubu’s decision to delay a cost-reflective tariff until regular and incremental power supply is achieved. He highlighted the gap between the intended cost-reflective tariff and the allowed tariff, stating that the government continues to subsidize power.

While acknowledging the liquidity crisis caused by non-implementation, Adelabu reiterated President Tinubu’s commitment to relieving hardship on Nigerians. He outlined the challenges associated with raising tariffs, considering factors like fuel subsidy removal, exchange rate fluctuations, and galloping inflation.

Adelabu, addressing the need for increased tariffs, explained that the government is paying about N70 per kilowatt-hour, a figure that would rise significantly if a cost-reflective tariff were implemented. He stressed the importance of sensitization, communication with the public, and an assured incremental and regular power supply before considering tariff increases.

The minister expressed dissatisfaction with Nigeria’s current power generation of about 4,000 megawatts, deeming it shameful and unacceptable. He assured efforts to increase power generation while emphasizing that non-performing officials within the ministry and its agencies would face dismissal.

Adelabu conveyed President Tinubu’s directive for ministers to perform or face termination. He urged support for his vision within the power sector and emphasized national interest.

The minister criticized the 2013 privatization of the power sector, deeming it a mistake and suggesting commercialization as a better alternative. Adelabu hinted at the government’s potential takeover of power distribution companies and a review of their territorial coverage.

Regarding the license extension granted to power firms, Adelabu stated that an investigation is underway to determine its legality and contractual correctness. He highlighted the importance of a performance bond agreement between the government and private sector operators.

Addressing the issue of supplying power to the Niger Republic, Adelabu clarified that it had not commenced, stating that Nigeria is monitoring the situation in the affected country. The National Bureau of Statistics reported fluctuations in electricity customer numbers, indicating a rise in Q2 2022 but a decline on a year-on-year basis.

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