The Federal Government has assured Nigerians that the imminent review of electricity tariff would not affect the poor masses rather, as they would pay lesser in comparison with what they are paying at present.
At a town hall meeting organized by the Power Ministry on Friday in Lagos, the Minister of Power, Prof. Bart Nnaji, stated that under the new tariff regime, the urban poor and rural dwellers would now pay N4 per kilowatts as against the previous N7 per kilowatts.
All consumers that fall between R1 and R2 based on Multi-Year Tariff Order (MYTO) indices would be exempted from monthly fixed charges while R3 to L1 are expected to subsidize the urban poor and the rural dwellers through cross subsidy programme.
The Nigerian Electricity Regulatory Commission (NERC) has announced that the new tariff structure. According to MYTO 2, it would take effect from June 1st, 2012, but this has generated a lot of mixed feelings among the stakeholders who preferred improved power generation before a new tariff structure will be introduced.
The Governor of Lagos State, Barrister Babatunde Raji Fashola, argued that deregulation and decentralisation was the answer to the dwindling fortune of Nigerian power sector, questioning the provision of subsidy in the programme.
Fashola said: “You all will agree with me that except we deregulate the sector, power challenges may persist because the present tariff will dissuade investors from investing in the power sector. But why is there subsidy in power sector? The adoption of uniform pricing is unrealistic based on disparity in the cost of production.”
The Governor of Niger State, Babangida Aliyu, said that the issue of electricity tariff was discussed at the National Economic Council (NEC) meeting and all the governors agreed that there must be a cost-reflective tariff in order to attract investors to the sector.
“Corruption is the challenge we are having in the power sector. Except the culprits are prosecuted, Nigerians may not have confidence in government policies. Right now, people are being charged for what they did not consume,” he said.
Meanwhile, the Governor of Bauchi State, Issa Yuguda, argued that the new tariff would promote competition among investors, which would force down the tariff in the long run.
According to the Electricity Power Sector Reform (EPSR) Act 2005, electricity tariff would be reviewed every five years in order to ensure cost-reflective tariff and to protect all stakeholders’ interests including the consumers, the investors and the regulators.