The Chairman of the Nigerian Electricity Regulatory Commission (NERC), Mr. Sanusi Garba, announced on Wednesday during a press conference in Abuja that the Federal Government remains committed to subsidizing electricity to alleviate the financial challenges faced by Nigerians due to economic difficulties in the country.
- He stated, “Government has decided for now, arising from the cost-of-living crisis and so many others, to in the meantime continue to subsidise electricity.”
- “In the new tariff order just published by the commission, you will discover that tariff is not going up, but you will see what the Electricity Distribution Companies (DisCos) should be charging.”
- “You will also see in the tariff order the amount of subsidy the government will be providing to cover the gap between what they will charge and what they are allowed to charge,”
He mentioned that the updated tariff outlines the charges that Distribution Companies (DisCos) are permitted to impose, aligning with government policy to sustain their operations.
Additionally, he emphasized that the tariff incorporates provisions to ensure that DisCos fulfil their financial obligations as stipulated.
Opportunities for States in the New Electricity Act
Garba noted that the Electricity Act, signed by President Bola Tinubu in 2023, created an opportunity for states to enact laws and assume responsibility for delivering electricity within their franchise areas.
He reiterated the commission’s commitment to collaborating with states to ensure existing public utilities are maintained for the provision of services to Nigerians and utilized as intended.
Regarding metering, the chairman acknowledged that Electricity Distribution Companies faced financial challenges in metering their customers. He highlighted that the rate of metering had been negatively affected by the DISCOs’ inability to secure the necessary capital from banks.
Backstory
- There have been feelers in recent times from DISCOs on plans to review the electricity tariff upward as a result of the rising cost of operations and maintenance.
- However, the National Assembly has rejected such a move to jack the electricity tariff citing an increase in the cost of living. The inflation rate for December 2023 rose to 28.92%– the highest in 27 years.
- Further increases in electricity tariffs might exacerbate the cost-of-living crisis currently being witnessed across the country.
