Adebayo Adelabu, minister of power, has revealed that the recently increased electricity tariff will reduce if the foreign exchange (FX) rate drops below N1,000 per $1.
On April 3, the Nigerian Electricity Regulatory Commission (NERC) gave the node for an increase in electricity rates per kilowatt for customers under the Band A classification.
The regulator had said customers under this category receive 20 or more hours of electricity supply daily, and will now pay N225 per kilowatt (kW) from April 3 — up from N66.
This was met with immediate criticism as stakeholders had described the increase as “ill-timed” considering present harsh economic reality.
On April 5, Adelabu said the tariff hike only affects 1.5 million customers — out of 12 million.
Speaking on a television programme on Thursday, the minister said by cutting the inefficiencies of some operators in the sector, coupled with the gains by the naira against the dollar, the tariff paid by Nigerians should change positively.
“The tariff is flexible and I can tell you that even if naira gains more and the exchange rate comes down below N1,000, it must positively affect the tariff and the tariff even for the Band A will come down below the N225 kilowatt per hour that we are currently charging,” he said.
“There are variable factors that go into the complication of the tariff and we are not closing our eyes to this.
“We are transparent. We are publishing it and we are talking to Nigerians, the consumers and all the power sector stakeholders.
“This administration is very serious and we are committed to transforming the sector.”
Adelabu also said the government is working tirelessly to ramp up power generation from about 4,000 megawatts to 6,000 megawatts in the next six months — “for the first time in the country’s history”.
He said 25 percent of Nigeria’s power generation is from hydropower while the remaining 75 percent is from gas plants.
On the Siemens project, Adelabu said the pilot phase is being concluded, which involves the importation of 10 power transformers and 10 mobile substations.
According to the minister, five of the transformers have been installed and commissioned at various locations across the country; while three of the mobile substations have been installed and are ready to be commissioned within the next two weeks.