President Tinubu Stops Implementation of Electricity Tariff Hike

The Minister of Power, Adebayo Adelabu, who spoke at a press briefing in Abuja, disclosed on Wednesday that President Bola Tinubu has recently stopped the implementation to hike the electricity tariff rather subsidy will be paid on power consumed nationwide.

However, the minister also stated that the legality of the five-year license extension awarded to privatized power distribution and generation companies will be investigated by the Federal Government.
He stressed that the operating licenses of the company are supposed to have expired on October 31, 2023.
Adelabu vowed that he would sack any non-performing chief executive under the power ministry.
Speaking on the call for a cost-reflective tariff, Adelabu 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 back, but Mr President said until we are able to 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. That huge gap the government is still handling as a subsidy. This affects liquidity in the system, and investments and causes so many constraints.”
He noted that the President had refused to allow a rise in the electricity rate even though the non-implementation of the hike in electricity tariff actually caused a liquidity crisis in the sector.

“Now, I never said that it is 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 additional burden on Nigerians. We just had the removal of fuel subsidy, we are talking about the 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,” Adelabu stated.

He maintained that the tariff would be increased at the appropriate time, which would be after a lot of sensitization and communication with the public.

The minister frowned at about 4,000 megawatts of power generation in Nigeria and tagged it as shameful and unacceptable but promised to increase it.

“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,” Adelabu stated.

The minister made it known that the privatization of the power sector in 2013 was a mistake, but commercialization should have been better.

He insisted that the Federal Government could still retain control of the power distribution companies despite owning a 40 per cent stake in the various firms.

He said the government might also carry out a review of the territorial coverage of the Discos, as most of them were handling so large territories and were delivering below expectation.

The minister said that the licenses of the privatized power firms he saw when resumed office, were for 2013 to 2023, but along the line got information that there was an extension by another five years. Hence, it will be investigated and the government will sit with the private sector operators to agree on a performance bond.

His words: “That is what actually matters to us now, but I can tell you that I’ve ordered an investigation into the extension of the licenses, (which was) not by this administration. So we want to investigate what truly happened.
“How legally correct was it, how contractually correct was the extension?” Adelabu stated.

Whether Nigeria had started supplying power to Niger Republic, the minister said, “We have not started. We are just messengers, when they ask us to resume, we will resume.”