The federal government has hinted at plans to increase the electricity tariff for other bands as a means of phasing out electricity subsidy in the country.

The minister of power, Adebayo Adelabu, disclosed this information while speaking at a briefing in Abuja on Friday.

Mr Adelabu’s statement comes just two days after the Nigerian Electricity Regulatory Commission (NERC) hiked the electricity tariff for customers under the Band A classification from N66 to N225 kilowatt per hour (KW/h). 

According to him, customers under the other bands will soon experience similar tariff hikes as the government moves to remove electricity subsidy in the sector.

He said the tariff review conforms to the government’s policy of “maintaining a subsidised pricing regime in the short run or the short term with a transition plan to achieve a full cost-reflective tariff over a period of, let us say, three years.”

The minister stated that full migrating into a cost reflective tariff or total removal of the subsidy in the sector, wasn’t done yet because the government is sensitive to the plights of Nigerians.

He said, “We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers.

“This is more like a pilot for us at the Ministry of Power and our agencies. It is like a proof of concept that those that have the infrastructure sufficient enough to deliver stable power of enjoying 20 hours of light to be the ones to get tariff add,” he added.

The minister revealed that if the power subsidy was not removed, the government would have paid N2.9tr for the subsidy in 2024, which according to him, is over 10 percent of the country’s budget.

“It will be insensitive on our part to compel the government to pay such subsidy when we have other competing issues the government needs to fund,” he explained.