Hike in electricity tariff inevitable, as FG introduces a new policy

The rise in electricity tariffs in Nigeria is inevitable as the Federal Government is introducing a new electricity distribution scheme called “Willing Seller, Willing Buyer”.

The disclosure was made by the Minister of Power, Engineer Sale Mamman, in a press release obtained from the official twitter handle of his office. According to Mamman, under the new differential power distribution policy, electricity would be wheeled directly from the generation companies to willing consumers who are ready to fully settle their bills.

Providing further updates, the minister disclosed that the policy was designed to save energy losses in the power sector, while also assisting generation companies which have not been getting full payment of power generated over time.

The new policy takes off as minister laments subsidy: It was further stated that the policy had already taken off as a pilot scheme in two states in Nigeria. According to Mamman, the Distribution Companies (DisCos) had not been distributing all the power wheeled to them on the pretext that the consumers were unable to pay for the power. This, he said necessitated the huge Federal Government’s subsidy intervention in the power sector, by paying the GenCos for undistributed power.

While providing details on debt that has ravaged the power sector, Engr. Mamman lamented that the Federal Government had approved intervention to the tune of N1.3 trillion to the GenCos. He explained that the huge subsidy being paid was weighing on government spending, adding that over 2,000MW of electricity was not being distributed due to the failure of the distribution chain.

Speaking further, the minister stated that the DisCos owed the GenCos and other 13 agencies in the power sector over N1.3 trillion, leading to low collection and remittances below 30%. However, the minister assured that the government was taking various measures, including the completion of on-going power projects to improve generation and distribution in the country.

Tariffs hike inevitable: In his concluding remarks, the minister disclosed that following the anticipated improvement in power supply to the country, the increase in electricity tariffs is inevitable, considering the cost of energy generation in Nigeria. Meanwhile, the minister urged Nigerians to be more responsible by paying their electricity bill as tariffs were higher in a neighbouring country like the Niger Republic.

According to Engr. Mamman, as parts 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.

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