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.”
Increase will not lead to efficient service delivery – Consumers
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 our correspondent, 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.
“The efficiency level is static or stagnated and what we are seeing is that we have seen different demands for increase in electricity tariff over the years from 2013 to date. There have been over 500 per cent increase in electricity tariff and even if electricity tariff is N1, 000 per kilowatt hour, it is not a guarantee for improvement in quality of service or hours of supply of electricity. So, it leaves much to be desired.”
According to him, “In the past, we thought cost reflective tariff will be complementary to service reflective performance but we were wrong. So, we will still be in the same situation. The truth of the matter is that even in band A, that is a major concern and so, the more we are able to have access to rooftop facility, like solar for domestic use, the better and the more we will get more captive or embedded generation for the industrial cluster.”
He added that ineptitude in the sector had made Nigerians familiar with technical terms like line tripping, grid collapse, high current, among others, which is not supposed to be so as Nigerians should have nothing to do with the process of electricity generation.
The Convener of Powerup, Adetayo Adegbemle, also said the planned increment of the tariff is a way of the federal government saying it can no longer foot the bill for electricity consumption in the country.
“This is federal government saying we don’t have money to continue to pay the blanket subsidy. This is not tariff increment. This is just right pricing the products. Everybody has come to terms with buying fuel at the current rate and we are sure that the federal government cannot turn around tomorrow to tell us that they are paying a single dime in subsidy.
“So, what government is just saying now is that, hey, we are tired of paying blanket subsidy. So, what they have done now is, okay, we are going to do right pricing. And we are going to give support of 50 kilowatts per month to Nigerians. So, Nigerians should expect that their first 50 kilowatts in a month is subsidised. But anything you buy after that, you buy it at full cost.”
