Electricity consumers have voiced strong opposition to the Federal Government’s proposed increase in power tariffs, which would see rates surge by over 66%, from N116.18 to N193.63 per kilowatt-hour.
The Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, recently revealed that electricity prices in Nigeria are expected to rise by approximately two-thirds.
Speaking at the Mission 300 Energy Summit in Dar es Salaam, Tanzania, Verheijen explained that the adjustment is necessary to align tariffs with the actual cost of power supply. He emphasized that the hike, expected within the coming months, would be accompanied by subsidies aimed at cushioning the impact on low-income consumers.
According to Verheijen, the increase is crucial to funding essential maintenance, improving the reliability of power supply, and attracting private sector investment in electricity 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
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.
