Increase in Electricity Tariff not Negotiable – Fashola

Increase in Electricity Tariff not Negotiable – Fashola

The minister of power, works and housing, Babatunde Fashola on Tuesday in Abuja announced that the federal government has no plan to review the 45 percent increase in electricity tariff.

Fashola who was speaking in Abuja as he briefed the Senate Committee on Labour and Power said a reversal of the announced increase will cost the government over N575 billion.

The Nigeria Electricity Regulatory Commission (NERC) in January announced a 45 per cent increment in electricity tariff.

The Senate, after considering a motion at plenary in January, said the increase should be reversed until it concluded its hearing on the case.

Fashola, however, held that the increase was necessary for the survival of the market. According to him, a number of indices, such as borrowing rate for investors, exchange rate, availability and cost of gas, among others also contributed to the hike.

“One of the reasons why the tariff had to go up was that a major component, a significant number of our power plant depends on gas and out of about 26 power plants that we have only about three are hydro.

“We were heavily dependent on gas, people were exporting gas because gas was selling outside the country at four dollars and it was selling for domestic use at one dollar,” he said.

According to Premium Times, Fashola pleaded with the lawmakers and Nigerians to be more patient with the government and investors on the process, saying three years of power privitisation was not enough to judge its success or failure.

Similarly, Anthony Akah, Acting Chairman, NERC, told the senators that the directive would have created avoidable setbacks in the sector.

He said that NERC was also hindered by a court order, obtained by six generating and distribution companies.

He said that the commission could also not easily reverse the tariff as the process was in compliance with section 76 (8) of the law guiding the operations of the commission.

However, the committee insisted that it was unacceptable for Nigerians to be paying so much but have limited power supply.