Oredola Adeola
Chief Adebayo Adelabu, Minister of Power, has revealed the Federal Government’s plan to phase out electricity subsidy and transition to full implementation of Cost Reflective Tariffs (CRT) over the next few years, adding that the recent MYTO April 2024 supplementary order aligns with President Bola Tinubu’s administration’s policy of maintaining a subsidized pricing regime in the short term.
Adelabu, made this known during 4th Ministerial Press Briefing Series on Friday, organised by the Ministry of Information and National Orientation in Abuja.
According to him, the FG intends to eliminate all subsidies in the power sector to encourage increased investment in the power sector.
The Minister described the hike in electricity tariff for customers on Band A, as a test phase towards completely eliminating electricity subsidies in the country.
Adelabu said, “This tariff review is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years.
“On different occasions such as this, I have stated that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in oil and gas sector.
“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.
“The Federal Government would have paid N2.9trillion as subsidy for electricity in 2024. This is more than 10 percent of the national budget for the same period. 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,” the Minister of Power said.
