FG bears 55% cost of power consumed by Nigerians, says minister
- Suspends controversial tariff hike
The Federal Government of Nigeria is responsible for 55 per cent payment of power consumed by on-grid consumers in selected bands qualified as low users in the country, Sale Mamman, minister of power, has disclosed.
He said this on Thursday as the government ordered the Nigerian Electricity Regulatory Commission (NERC) to suspend the implementation of the January 1, 2021 nationwide electricity tariff hike.
Mamman further noted that the government never hiked tariff by 50 per cent, as erroneously reported by some sections of the media.
On why the tariff hike should be reverted, he explained that the government and labour had been engaged in discussions about the electricity sector through a joint ad-hoc committee led by the Minister of State for Labour and Productivity and co-chaired by the Minister of State for Power.
Mamman said in a statement he personally signed that great progress had been made in these deliberations which were set to be concluded at the end of January 2021.
He noted that some of the achievements of this deliberation with labour were the accelerated rollout of the National Mass Metering Plan and clamp downs on estimated billing.
Others include improved monitoring of the Service Based Tariff and the reduction in tariff rates for bands A to C in October 2020 (that were funded by a creative use of taxes).
“To promote a constructive conclusion of the dialogue with the labour centres through the joint ad-hoc committee, I have directed NERC to inform all Discos (distribution companies) that they should revert to the tariffs that were applicable in December 2020 until the end of January 2021 when the Federal Government/labour committee work will be concluded,” Mamman stated.
He added, “This will allow for the outcome of all resolutions from the committee to be implemented together.”
The minister said the government did not raise tariff by 50 per cent, rather it had been subsidising about 55 per cent of low income power users.
He said, “Government continues to fully subsidise 55 per cent of on-grid consumers in bands D and E and maintain the lifeline tariff for the poor and underprivileged.
“Those citizens have experienced no changes to tariff rates from what they have paid historically, aside from the recent minor inflation and foreign exchange adjustment.”
Mamman stated that partial subsidies were also applied for bands A, B and C in October 2020.
He said these measures were all aimed at cushioning the effects of the pandemic while providing more targeted interventions for citizens.