Adebayo Adelabu, the Minister of Power, reveals that the Federal government has expended N700 billion in subsidizing electricity. Adelabu emphasizes that the ongoing subsidy is necessary due to the non-cost-reflective nature of the current tariff permitted for Distribution Companies (DISCOs).
During his official visit to the Ibadan Electricity Distribution Company (IBEDC) Head Office in Ibadan as part of his nationwide tour starting in Oyo State on Monday, January 15, Adelabu stated, “The Federal Government still subsidizes electricity because the current tariff DISCOs are allowed to charge is not cost-reflective. This is why the Federal Government spent close to N700 billion in 2023 to subsidize electricity. If tariffs are left at this current rate, it is projected that the government will spend about N1.7 trillion to subsidize electricity. The FG cannot afford that.”
He emphasized the need for sensitization and advocacy before any tariff review, asserting that the review would be “graduated,” with a higher adjustment for the high-income segment and a reduced impact on the vulnerable. Adelabu insisted that an enhanced power supply is a prerequisite for the tariff review, stating, “There must be an upward review of the electricity tariff to reduce the amount of subsidy required. If we make the tariff 100 per cent cost-reflective, the burden will be too much on our people. We don’t want that. To reduce the burden on our people, it is only a fraction of the tariff review that will be reflected.”
