Power consumers have opposed plans by the Federal Government to raise electricity tariffs by over 66 per cent, from N116.18 to N193.63 per kilowatt-hour.

The Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, recently disclosed that the current power tariffs would rise by about two-thirds.

Verheijen said Nigeria’s power prices need to rise by about two-thirds for many customers in order to reflect the cost of supplying it, adding that an increase should be expected within months.

In an interview with newsmen during the Mission 300 Energy Summit in Dar es Salaam, Tanzania, Verheijen disclosed that higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance necessary to improve reliability and to attract private investors into power generation and transmission.

Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it.

“Higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance needed to improve reliability and to attract private investors into power generation and transmission,” Bloomberg quoted Verheijen as having said.

“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff,” Verheijen said

She added that this is needed “so the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable.”

Nigeria’s power industry needs significant investment to achieve its development aims, Verheijen said. Of the country’s 14 gigawatts of installed power, only 8GW can be transmitted around the country and just 4-5GW can be directly delivered to homes and businesses, she said.

A senior official of the Nigerian Electricity Regulatory Commission told one of our correspondents that all electricity customers, except those already on Band A, should be prepared for a cost-reflective tariff.

The official, who did not want to be mentioned for not being authorised to speak with the press, said the subsidy is becoming a burden to the government and the failure to pay the same to the Discos is affecting liquidity.

“A cost-reflective tariff is coming sooner or later. The government can no longer shoulder the responsibility of paying subsidies. It is no longer sustainable. So, all customers should get set for new tariffs,” the official stated.

Recently the Minister of Power, Adebayo Adelabu, also hinted that the Discos were calling for a cost-reflective tariff.

Also, electricity distribution companies complained that the Federal Government has not been fulfilling its promise to pay the cost of subsidising the electricity consumed by customers on Band B to E.

https://punchng.com/electricity-tariff-hike-looms-as-fg-plans-to-end-subsidy/