The federal government has revealed that an estimated N3.2 trillion subsidy would be necessary to roll back the current electricity tariff increase. Sanusi Garba, Chairman of the Nigeria Electricity Regulatory Commission (NERC), made this declaration during a stakeholders’ meeting convened by the House of Representatives committee on power in Abuja.
Garba emphasized that the current investments in the sector were insufficient to ensure consistent power supply nationwide. He highlighted concerns over foreign exchange fluctuations and non-payment for gas, warning of potential sector collapse if left unaddressed.
Prior to the tariff review, Electricity Distribution Companies (DisCos) were only required to cover 10% of their energy invoices, leading to liquidity challenges due to the lack of subsidy cash backing.
The vice-chairman of NERC, Musiliu Oseni, defended the recent tariff hike, citing its necessity to prevent the sector from collapsing entirely.
Chairman of the committee, Rep. Victor Nwokolo, stressed the importance of the meeting in addressing tariff increases and related issues. While acknowledging the valuable information provided by NERC and DISCO officials, Nwokolo underscored the urgent need for tariff adjustments to meet the industry’s capital requirements, especially amidst Nigeria’s population growth and expanding network needs.
