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Increase in electricity tariff to kick off in July- Minister

SALE Mamman, Minister of Power has said that the new increase in electricity tariff would kick off in July.

Mamman disclosed this in Abuja at the Investigative Public Hearing on Power Sector Recovery Plan and the Impact of COVID-19 pandemic organised by the Senate Committee on Power.

The Minister stated that the COVID-19 pandemic has affected the framework for repositioning the electricity market towards financial sustainability under the Power Sector Recovery Programme.

“The impact of this means the subsidy being incurred in maintaining the current tariff level has to be maintained until July 2020 when the proposed tariff review will be implemented,” he said.

Mamman admitted that after the completion of public consultation on tariff review, it was initially planned to conduct a tariff review in April, but the COVID-19 outbreak and customer apathy caused the proposed tariff review to be delayed by three months.

“The challenge we are currently facing in the development and expansion of our transmission line is budget and release of Federal Government’s commitment in the estimated sum of N32 billion primarily for the right of way acquisition and environmental impact mitigation,” he said.

“The fund should be provided for in 2020, 2021, and 2022 Appropriation of the Ministry of Power.”

He also said the COVID-19 pandemic had a great economic impact not on the health sector alone but on the overall economy.

“Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain which by default affects the purchasing power of consumers and the demand for electricity in general,” Mamman explained.

He further stated that 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 allocations.

“For projects that we have already secured their funding, we do not expect any adverse effect.”

He, however, said his ministry was proactively seeking strategies to identify projects that would require counterpart funding in the face of dwindling national revenue so as to deliver within the projected timelines.

“This explains our prayer for the distinguished senators to consider and approve additional funding for the execution of the various projects we are undertaking,” he said.

On December 31, 2019, Nigerian Electricity Regulatory Commission, (NERC), had announced its plans to review electricity tariffs in the country from January 1.

The order titled “December 2019 MYTO Minor Review Order” for the 11 electricity distribution companies (Discos) was jointly signed by Joseph Momoh, the Chairman of the Commission, and Dafe Akpeneye, Commissioner for Legal, License & Compliance.

However, the Commission clarified later that the new tariff regime would not take effect until April 1, 2020, to allow it sufficient time to consult all the interest groups following reservations from Nigerians.

 

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