The Minister of Power, Adebayo Adelabu says with at least 20 hours of daily power supply, manufacturers under Band A will spend less on energy by reducing the cost of production.
Some weeks back, the Federal Government increased the tariff for Band A electricity consumers, those who enjoy at least 20 hours of electricity – prompting a clap back from Nigerians who argue that the move would increase hardship.
But at the 8th Africa Energy Market Place (AEMP) in Abuja on Thursday, Adelabu told the gathering that the hike in tariff would lead to a reduction in energy costs for manufacturers under Band A.
“Those on Band A, if they should do their arithmetic properly, to compare what they have been spending on energy provision from grid supply and energy generators put together, before the review of tariff, they have achieved nothing less than 30 to 40 per cent reduction in their total cost. That is the truth.
“We are also electricity consumers, so we can attest to this fact. It is true that if you are in Band A, your bill would have doubled if not more. But check out what you have been spending on your generator servicing, diesel, and petroleum procurement, it would have down considerably, ” he said.
He added,“So the argument of this new tariff having the capacity of increasing the cost of production and raising the prices of goods and services is not logical.
“Manufacturers under Band A should have a lower Energy cost by now, thereby, reducing their cost of production. Except those that have not been paying for electricity in the past. We can also come together to compare notes with practical example. But how this new tariff regime will increase the cost of production is not valid because I am in that industry too.”
Labour unions and several high-profile Nigerians including a human rights lawyer Femi Falana had faulted the move.
According to the labour unions, with the country battling historic inflation levels, the step would impoverish Nigerians.
However, the minister said, “The electricity tariff was not targeted at improvising Nigerians or worsening the already bad economic situation of the high inflation rate and naira losing value but targeted at resolving or reducing the hardship of the people”.
