FG plans N1.5tn savings, 2.5m meter installations

Onwubuke Melvin
Onwubuke Melvin

The Federal Government has declared that a total of N1.5 billion in revenue would be saved and about 2.5 million meters would be installed this year to bridge the metering gap in the country and ensure consumers pay the right amount for electricity.

This follows the recent hike in electricity tariff for Band A customers.

Recall that The Special Adviser to the President on Information and Strategy, Bayo Onanuga, had recently noted that the government withdrawal of electricity subsidy from 15 per cent of power consumers in Nigeria would save the government about N1.1tn annually.

Onanuga had said the Bola Tinubu administration was about to authorise an electricity price increase given its N450 billion budget for energy subsidies by 2024.

However the Federal Ministry of Power on Wednesday, in a document on issues about the hike in tariff revealed by the media aide to the power minister, Bolaji Tunji, via his X handle, the government said it would save N1.5tn with the recent tariff adjustment.

It said, “FG (Federal Government) to save N1.5tn with tariff adjustment. FG still subsidising Bands below A. Pricing change will help improve liquidity to the NESI (Nigeria Electricity Supply Industry).

“Discos (power distribution companies) will be sanctioned for supplying less than 20 hours to Band A consumers.”

This decision by the Federal Government to remove subsidy on electricity tariff payable by power consumers, particularly in the Band A category has continued to generate controversies.

Last week,  organised labour criticised the hike in tariff payable by about 1.9 million consumers, threatening industrial action against the government.

Nevertheless, subsidy on electricity was withdrawn completely from the tariff of consumers in the Band A category, which constitutes about 15 per cent of the total 12.82 million power consumers across the country.

The government announced the hike in electricity tariff at a press briefing in Abuja by the Nigeria Electricity Regulatory Commission, adding that those affected would pay N225 per kilowatt-hour, up from the previous rate of N68/kWh, representing about a 240 per cent increase.

Meanwhile, the power ministry said on Wednesday that the  Federal Government aimed to close the meter gap with about 2.5 million unmetered power users across the country annually.

“The Presidential Meter Initiative aims to install a minimum of 2 – 2.5 million meters yearly within the next five years,” it stated.

To close this gap, the Federal Government established the Presidential Metering Initiative, which was announced by the Minister of Power, Adebayo Adelabu, at a briefing in Abuja.

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