The plan to increase electricity tariff may soon see the light of the day as the Nigerian Electricity Regulatory Commission (NERC) recently disclosed that tariff payable by electricity consumers may increase by 61.5 percent any moment from now.
Making this known during a training session in Abuja, NERC’s Principal Manager, Tariff, and Rates, Mrs. Aisha Mahmud said that the commission had completed the process for the new tariff, adding that it is awaiting a final approval from the Federal government before the implementation begins.
According to her, the actual tariff for one kilowatt-hour of power is meant to be N51, as against the current unit cost of N31.58 for which electricity distribution companies are selling the commodity, noting that the actual tariff of N51/KWH was agreed on considering the economic fundamentals when carrying out minor tariff reviews.
NERC explained that Electricity distribution companies had been lamenting about the unfavourable pricing policy of the N31.58/KWH of energy, stressing that they (Discos) bought the commodity at N68/KWH but were mandated by NERC to sell at a far lesser rate that is not inappropriate
According to Executive Director, Research, and Advocacy, Association of Nigerian Electricity Distributors, Mr. Sunday Oduntan “There is no way you can pay or remit the required amount that is needed from you as a Disco when you sell a product that is worth N68 for N31.58. It won’t work.”
Mahmud however denied claims that the regulator forced the Discos to sell power at the reduced price, adding that NERC is observing the market cautiously and is looking out for considerable improvement in the power supply to consumers.
She made the disclosure that NERC had painstakingly done a review and that was why they agree that electricity tariff should be N51/KWH which they believe is very feasible, considering the fact on ground.
“We have done the review and it is the Federal Government that is to decide on whether to implement the N51 price for a kilowatt-hour or not, as against the N31/KWH that is being paid for the commodity presently. Once we get the approval from the government, we will announce its implementation,” Mahmud said.
It should be noted that Power distributors had argued that they were not remitting the amount required of them by the sector because of the policy of the sector that required them to collect far less than the actual unit cost for a kilowatt-hour of electricity.