Adebayo Adelabu, Nigeria’s Minister of Power, has indicated that electricity consumers under Band B may soon face a tariff increase, stating that they are not paying enough compared to the level of electricity they receive.
Speaking on Thursday at the public presentation of the National Integrated Electricity Policy (NIEP) and the Nigeria Integrated Resource Plan (NIRP) in Abuja, Adelabu suggested a possible restructuring of electricity consumer classifications to address disparities in pricing and supply.
The federal government had previously approved an increase in electricity tariffs on April 3, 2024, for Band A customers while leaving other bands unchanged. Under the current structure, Band A customers receive a minimum of 20 hours of electricity per day, Band B gets at least 16 hours, while Bands C, D, and E receive 12, 8, and 4 hours, respectively. Following the price review, Band A customers began paying N209 per kilowatt-hour, while Band B customers continued to pay N63 per kilowatt-hour despite receiving only a few hours less power than Band A users.
Restructuring of Electricity Bands
At the event, Adelabu disclosed that the government is considering merging some customer bands to create only three categories: A, B, and C. He argued that the difference in power supply between Band A (minimum of 20 hours) and Band B (maximum of 18 hours) is too wide and should be adjusted for fairness.
“We anticipated a faster migration to Band A, but we realized that distribution companies (DisCos) have refused to invest in their networks,” Adelabu said.
According to him, the lack of investment has slowed the transition of lower-band customers to Band A, prompting the government to reconsider its classification system.
“We are looking at what we can do. The gap between Band A tariffs and those of Bands B, C, D, and E is too wide. To be fair and just, we need to minimize this disparity,” he added.
Potential Impact on Consumers
Adelabu explained that many Band A customers have requested downgrades to Band B to reduce their electricity costs, noting that a fairer price adjustment could make such requests unnecessary. He suggested that if Band B customers receive up to 16-17 hours of electricity, they should pay rates closer to Band A users.
Additionally, the minister revealed that the migration of some customers to Band A has resulted in a 70 percent increase in revenue for the power sector, rising from N1.05 trillion last year to approximately N1.7 trillion.
While the proposed tariff adjustment aims to reduce disparities and increase supply to lower bands, the government is expected to continue engagements with stakeholders before implementing any changes.