A whopping N3.2trn would be required in 2024 to avert the recent rise in electricity tariffs. This was noted by the NERC Chairman, Sanusi Garba, on Thursday at the stakeholders meeting summoned in Abuja by the House of Representatives Committee on Power.
In addition, the Chairman noted that there is a lot of investment in the power sector, but it is not sufficient to guarantee a stable supply of power across the country.
He clarified that distribution businesses were only required to pay 10% of their energy invoice before the most recent tariff revision and added that the industry was experiencing liquidity issues due to the absence of financial support.
He went on to say that the power tariff went from 55% to 94% between January 2020 and January 2023 and that “the unification of FX and current inflationary pressures are pushing cost-reflective tariff to N184/kWh.”
“If doing nothing and sitting back is the best course of action, the National Assembly and the Executive would have to provide about N3.2 trillion to pay for subsidy in 2024,” the speaker stated.
Garba added, “Only N185 billion of the N645 billion subsidy in 2023 will be provided.”
Musiliu Oseni, the Vice Chairman of NERC, supported the Chairman, justifying the recent rise in electricity tariff as necessary for the sector to continue running.
The lawmakers have commended the efforts of the NERC officials and the DISCOS officials in providing helpful information to the committee regarding the rise in tariffs.
However, it’s been noted that their meeting has yet to be concluded due to the transmission and generating companies’ absence. There will be further consultation the following week.
The lawmakers have also backed the power sector on the increase in electricity tariff, noting that the tariff was meant to have been changed in 2022.
Moreover, the areas being served have grown beyond their previous estimates due to Nigeria’s population expansion, and they also require more funding to expand their network.
“Every day, there are fluctuations in the currency’s value and security risks to power infrastructure, which raises overhead.
“We are not saying yes or no; we want to get more input and find out if gas can be sold to them in naira, so the committee has yet to agree with them fully.
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