Electricity Tariff Increase Inevitable, Says FG
The federal government has said it is expecting an improvement in electricity supply to Nigerian, just as it revealed that an increase in electricity tariff will be inevitable.
The Minister of Power, Saleh Mamman, said this a statement signed by his media aide, Aaron Artimas.
He said the government was heavily burdened by the financial interventions it was providing the power sector to cushion its challenges.
Mamman, equally complained that while the cost of electricity units in neighboring Niger Republic was higher than it is in Nigeria, consumers in Niger were prudent in their payment for electricity bills unlike in Nigeria where he claimed consumers evade payments.
According to him, the government has introduced a new electricity distribution policy called ‘willing seller, willing buyer,’ in which electricity would be supplied directly from the generation companies (Gencos) to willing consumers who are ready to fully settle their bills.
He explained that under the new differential power distribution policy, the willing consumers may include community and commercial clusters, industrial areas and hospitality sectors.
“The policy was designed to save energy losses in the power sector and assist generation companies who have not been getting the full payment for their generated power,” Mamman, was quoted to have said in the statement.
He equally said electricity distribution companies (Discos) have not been distributing all the power supplied to them on the pretense that consumers were unable to pay for the power.
This according to him, necessitated the government’s huge financial intervention in the sector by reportedly paying the Gencos for undistributed power.
Mamman, stated that in 2018, government approved N700 billion as intervention fund for the Gencos and recently, another N600 billion approved for the same purpose.
He explained that the huge subsidy was an overbearing burden on the government, adding that over 2,000 megawatts (MW) of electricity was not being distributed due to the failure of the distribution chain.
According to him the Discos owed the Gencos and other stakeholders in the sector over N1.3 trillion, adding that their collections and remittances have remained below 30 per cent despite several efforts to make them improve.
Assuring that the government was taking various measures including the completion of on-going power projects to improve generation and distribution in the country, Mamman called on Nigerians to be more responsible citizens by paying their electricity bills.
He said: “In the neighboring Niger Republic, electricity tariffs were higher but payments were almost one hundred per cent,” adding that, “as part of efforts to improve power supply to the North, a new 330kVA line would be installed for Kano and other cities to balance the distribution in the country.”
He however, hinted that with the anticipated improvement in power supply to the country, the increase in electricity tariffs was inevitable considering the cost of energy generation in Nigeria.