In a recent visit to the Ibadan Electricity Distribution Company (IBEDC) headquarters, Minister of Power, Adebayo Adelabu, disclosed the Federal Government’s intention to gradually phase out electricity subsidies through a planned tariff hike. The move aims to alleviate the financial burden on government expenditures.
Adelabu highlighted that the current electricity tariff charged by Distribution Companies (DISCOs) is not cost-reflective, prompting substantial government subsidies. In 2023 alone, nearly N700 billion was expended on electricity subsidies, and without adjustments, projections indicated a potential increase to N1.7 trillion.
“To reduce the amount of subsidy required, there must be an upward review of the electricity tariff. However, to ease the burden on the public, only a fraction of the tariff review will be reflected,” stated Minister Adelabu.
He emphasized a phased approach to tariff adjustment, with awareness campaigns preceding the reassessment. Adelabu clarified that the graduated tariff increase would impact the affluent more significantly, aiming to minimize the effect on the less privileged.
The minister stressed the necessity for improved power supply as a prerequisite for the tariff review.
Adelabu’s visit to IBEDC aimed to assess the state of electricity infrastructure across the country. He previously inspected key transmission facilities, including the Ayede 330/132KV transmission substation in Ibadan. Plans were revealed to inaugurate solar-powered mini-grids in specific local government areas, overseen by the Rural Electrification Agency (REA).
Acknowledging IBEDC as the largest DISCO in terms of coverage, Adelabu stressed the need for collective efforts between the government and private sector stakeholders to enhance the electricity sector’s performance. He highlighted President Bola Tinubu’s commitment to a stable power supply, emphasizing its crucial role in economic growth and national development.
Kingsley Achife, CEO of IBEDC, welcomed the minister’s inaugural visit and advocated for a correction in the electricity tariff during his response.
The minister also disclosed plans for upgrades and new substation establishments to enhance the transmission infrastructure.
