Nigeria’s new electricity tariff, a sacrifice worth making – LCCI

Naomi Uzor & Olayemi Fofah

20 June 2012, Sweetcrude, LAGOS — THE Lagos Chamber of Commerce and Industry, LCCI, Tuesday, said the new electricity tariff introduced by National Electricity Regulatory Commission, NERC and Minister of Power, Professor Barth Nnaji, was a sacrifice worth making.

LCCI’s Director-General, Mr. Muda Yusuf, in a statement,in Lagos, said, “NERC had argued that the proposed tariff review was a major plank of the power sector reform and that the purpose was to make electricity tariff cost-reflective, so as to attract investors to the sector. It is difficult to fault this position, especially in the light of the clamour by the citizenry for a private sector-driven power sector,” adding that he believed it was a sacrifice worth making.

He, however, added that, “The payment of monthly fixed charge ranging from 500 to over N100,000 is a cause for worry. There is no justification for this under the current tariff regime since the tariff is now cost- reflective. Imposition of fixed charge, irrespective of whether there is power supply or not, is exploitative and would encourage inefficiency and should, therefore, be reviewed.”

Supporting the new tariff, he said: “In any event, it will still be cheaper (even with the review) than individual firms or households providing electricity through generators powered by diesel, petrol generators or LPFO. We also expect that this process would lead to the ultimate exit of the public sector in the direct management of the sector and limit itself to a purely regulatory function. However, electricity consumers should not be made to pay for inefficiency or corruption costs.”

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