Why we cannot increase electricity tariff now – FG

Despite industry players’ call for a cost-reflective tariff, the Federal Government (FG) on Wednesday said it can not approve tariff increase due to the country’s current economic woes.

The Multi-Year Tariff Order (MYTO) methodology gives room for the biannual review of tariffs with consideration to inflation, interest rates, and foreign exchange, while major reviews are carried out every 5 years when all of the inputs are reviewed with stakeholders.

In July 2023, the Electricity Distribution Companies (DisCos) made attempts to increase tariffs thus filing an application for rate review with the Nigerian Electricity Regulatory Commission (NERC).

But the Minister of Power, Chief Adebayo Adelabu at an interactive session with journalists in Abuja on Wednesday said although the government ought to have increased tariffs which is a major cause of liquidity challenge, this was shelved.

According to him, if the review is approved, Nigerians will pay double of the current rate.

“I never said it is not time to charge cost-reflective tariff, I said cost-reflective tariff ought to have been implemented months ago because it is the source of liquidity to the system, but for political reasons and empathy, we cannot impose additional burden on Nigerians.

“It is not politically expedient to now implement a tariff that is more like doubling the existing tariff, but for political expediency, I don’t think it is something that we can do so immediately,” he said.

The Minister stressed that before it approves tariff increase,”there will be lots of sensitization and communication with the general public and we must ensure that there is an assured increment in power supply.”

Meanwhile, Adelabu stated that the 700megawatts Zungeru hydro power plant will commence operation by December ending.

While confirming the completion of the project he said,”the only thing left is just to complete the rest of the evacuation infrastructure so that the entire 700 megawatt being generated can be evacuated into the transmission as it is today, the infrastructure we have there can only generate 300 megawatts.”

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