Two days after the Nigerian Electricity Regulatory Commission (NERC) approved increase of electricity tariff for customers under the Band A classification, the Federal Government has hinted that a similar measure would be extended to others.

Speaking at a briefing in Abuja on Friday, Minister of Power, Adebayo Adelabu, said the recent increase in electricity tariff is a pilot in phasing out of electricity subsidy in the country.

He said the government plans to remove all subsidies in the sector to allow the thriving of investment in the power sector.

The Minister said: “This tariff review is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years. I have mentioned it in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.”

The Minister added that the N225 kilowatt per hour Band A customers are charged as little in relative to the N500 they pay for alternative energy like diesel and others.

While explaining that Nigeria is experiencing a subsidy pricing regime where the government provides a large portion of the generation, transmission and distribution cost, he said the government was formerly subsidising 67 percent of the cost of electricity.

Source: Daily Trust