Nigerian Government Will Cut Electricity Subsidy To Ease Pressure On Public Finances, Says Presidency

 

 

President Bola Tinubu's administration has planned to hike electricity prices for sector revamp by cutting subsidy for 15% of consumers.

 

The development, which will reduce its N3.3 trillion ($2.6 billion) cost, will be part of reforms to ease pressure on public finances.

 

Mr Bayo Onanuga, the Special Adviser to the President on Information & Strategy disclosed on Tuesday.

He noted that the government was under pressure to allow a price increase in the electricity sector, Reuters reports.

It budgeted N450 billion for the subsidy this year, Onanuga said.

 

Onanuga explained that Nigeria last reviewed electricity tariffs in 2020.

The Minister of Power, Chief Adebayo Adelabu, had in February advocated for Nigeria to migrate to a full cost-reflective tariff regime if the federal government cannot pay for subsidies owed to the market.

 

Adelabu, who gave the advice during a nationwide inspection visit to power installations, expressed concerns over the poor electricity supply situation in the country caused by several issues including outstanding subsidy debts.

 

The minister also stated that the National Independent Power Plants (NIPPs) being operated and managed by the Niger Delta Power Holding Company Plc (NDPHC) were currently suffering under-capacity utilisation of below 25 per cent due to gas supply constants.

 

As part of the inspection, the minister visited the 750 megawatts (MW) Olorunsogo Power Generating Plant in Ogun State and the 500MW Omotosho Generating Plant in Ondo State on Wednesday.