FG plans fresh electricity tariff hike
2 min read
The federal government says plans are ongoing to increase electricity tariffs “over the next few months”.
It, however, said that the planned increase needed to be balanced by subsidies for less-affluent electricity users.
Bloomberg quoted the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, as giving this hint at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, where Nigeria presented a $32 billion plan to expand electricity connections by 2030.
The fresh move to raise tariffs comes amid mounting pressure from Nigeria’s debt-burdened electricity distribution companies for tariffs to be cost-reflective so they can improve their finances.
Last year, the federal government approved a threefold increase in electricity tariff for customers under the Band A classification.
The Nigerian Electricity Regulatory Commission (NERC) had in April 2024 effected a 300 per cent rise in electricity tariff for Band A customers from N68 KWh to N225KWh.
While making the announcement, the Vice Chairman of NERC, Musliu Oseni, said the increase affected 15 per cent of electricity customers while insisting that the decision was taken to ensure stability in the power sector.
Similarly, the Minister of Power, Adebayo Adelabu, while defending the increase said continuous payment of subsidy for the category would jerk up the government’s subsidy payment to N2 trillion annually if nothing was done.
But the tariff has been reduced since then and currently pegged at N209.50.
On the latest plan to increase the electricity tariff, the presidential aide said Nigeria was trying to resolve the transition to a cost-efficient but cost-reflective tariff to attract private investors.
She said: “One of the key challenges we are looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff.
“So, the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable.”
Meanwhile, the President of Nigeria Consumer Protection Network, Kunle Olubiyo, said no matter the amount of increase in the electricity tariff, it would not result to efficient service delivery.
Speaking with Daily Trust, Olubiyo said the country had witnessed over 500 per cent tariff increase since the sector was privatised but services remained poor in the country.
He said the country continued to grapple with less than 6, 000 megawatt of electricity which is not sufficient to meet the needs of Nigeria’s population.