22 February 2012

Nigeria: No Plan to Increase Electricity Tariff By 88 Per Cent in April - Minister

Photo: Vanguard
The Federal Government has failed on its promise to achieve the target of 6,000 Mega Watts (MW) of electricity generation last December

The Minister of Power, Prof. Bart Nnaji says the electricity tariff in Nigeria will not go up by 88 per cent as being speculated in some quarters.

A statement issued on Tuesday by Cdon Adinuba and made available to the newsmen quoted Nnaji as making the clarification before the Senate Committee on Power.

Nnaji said that recent media reports claiming that all electricity consumers would get a tariff increase on April 1"by almost double" are not factual.

"In fact, the urban poor and rural dwellers as well as artisans like welders who perform vital economic functions will experience no significant adjustment.

He said that a substantial percentage of people living in towns and cities would not pay much higher because they are "among beneficiaries of the Federal Government's N60 billion subsidy this year and the N50 billion subsidy next year".

The minister argued that certain classes of electricity consumers are subsidized throughout the world, calling electricity "a critical need, rather than a mere want, of the people, especially in the modern times."

Nnaji revealed that by 2014 when the government subsidy is expected to end, the less affluent in society would continue to enjoy subsidy, this time with the subsidy paid by the rich and other heavy electricity end users.

He rejected suggestions that the planned introduction of different tariffs across the country would be abused by some wealthy people claiming to be poor so that they could pay less bills.

"The tariff will be determined by the wattage consumed by each customer."

He explained that "those who consume less than 50watts a month are considered less privileged and are known as R (Residential) One customers. We have 14 classes of consumers".

Nnaji noted that the new tariff was originally scheduled to start on January 1 as provided in the Multi Year Tariff Order (MYTO), which came into effect five years ago.

He said that would now begin next May to allow for more improvements in power supply and greater public enlightenment on the ongoing reform of the power sector.

Comparing the situation to what happened with the telephone sector where the tariff reduced with time, the minister observed that the electricity tariff would come down.

"The tariff being proposed is based on 4,500Megawatts, and it will come down considerably when we begin to generate 7000MW and above".


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