The anticipated increase in electricity tariffs by the Federal Government is set to commence in July, as stated by the Minister of Power, Sale Mamman.
In January, the Nigerian Electricity Regulatory Commission (NERC) announced a planned upward adjustment of electricity tariffs nationwide, effective from April 1. However, this proposal was postponed in March due to the COVID-19 pandemic.
During a Senate hearing on the power sector recovery plan and its impact on the COVID-19 pandemic, Minister Mamman emphasized the unsustainability of the subsidy required to maintain the current tariff level.
He mentioned the disruption caused by the pandemic, stating, “The impact of the COVID-19 pandemic has also affected our laid-out plan for the repositioning of the electricity market towards financial sustainability under the power sector recovery programme (PSRP). Initially, the regulator, following the completion of public consultation on tariff review, planned on conducting a tariff review in April 2020. However, due to COVID-19 and customer apathy, the proposed tariff review was delayed by three months. The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained until July 2020 when the proposed tariff review will be implemented. The current situation in the Nigerian power sector is that a lot of capital investment is being made, most of which is dependent on donor funding, loans and budgetary allocation. For projects that we have already secured their funding, we do not expect any adverse effect.”
The Minister’s remarks came during the investigative public hearing, shedding light on the challenges faced in the power sector.