Vanguard Editorial for March 21, 2025
About a year ago, Nigerians woke up to be confronted with a massive hike in power supply tariff. President Bola Tinubu’s government, which operates an economic template dictated by the IMF/World Bank, extended his subsidy removal to the power sector.
On his Inauguration Day (May 29, 2023) he had announced the immediate commencement of implementation of the removal on petrol subsidy which his predecessor, Muhammadu Buhari, had set for June. Petrol price jumped almost 500 per cent, throwing Nigerians into a paroxysm of pains and extreme hardship.
The removal of power subsidy less than a year later was like adding salt to injury. The World Bank had dangled mouth-watering multi-billion dollar loans if the Federal Government removed subsidies on petrol and power, and embarked on a set of tax reforms. It did not come as a surprise for watchers of the Tinubu administration when Minister of Power, Adebayo Adelabu, introduced a new power tariff regime based on classification of consumers.
Adelabu introduced the controversial “banding” system whereby consumers were supplied power according to the “bands” they found themselves in. Particularly hard-hit were those on “Band A” who were made to pay N225 per kilowatt hour, up from the previous N63kw/h, almost 400 per cent. They were to enjoy power supply up to 20 hours per day. Supply was classified as follows: Band B, 16 hours; Band C, 12 hours; Band D, 8 hours; and Band E, 4 hours.
By June 2024, Adelabu announced that payments by “Band A” consumers had reduced the subsidy the Federal Government paid to one trillion naira. FG claims that it still paid N1.9trn subsidy last year. The new move to increase the tariffs payable by the lower cadres is meant to mitigate the existing subsidy and continue to increase power generation which, according to Adelabu, has just crossed the 6000 megawatts mark.
Nigerians received this notice of further impending tariff increase with dismay, and for obvious reasons. In the first place, the classification of power supply has not worked as planned. For most Nigerians, the only thing that changed since the classification was implemented a year ago is the higher cost of power. It is still same old story of epileptic supply.
We call on the Federal Government to rethink their plan to increase tariffs for lower bands until actual supply is guaranteed. These lower “bands” are the Nigerian masses who deserve to be protected by government rather than preyed on. We condemn the forceful conscription of consumers to higher “bands” that they can hardly afford, and urge government to allow people choose levels they can afford.
Withdrawal of energy subsidies is an abdication of responsibility to the people who produce the wealth of the nation. The people need relief from draconian economic policies, not more squeezing.
