New power tariff to last 10 years, says Fashola

Oscarline Onwuemenyi 10 February 2016, Sweetcude, Abuja –  Despite public outcry and opposition by organised labour, the new electricity tariff regime instituted by the Nigerian Electricity Regulatory Commission, NERC, still took effect on February 1.

Babatunde fashola

Mr. Fashola

According to Minister of Power, Works and Housing, Babatunde Fashola, the new electricity tariff regime would last for 10 years, and during the years, it was expected that energy tariffs must come down and the sector stabilised.

He maintained that this was the first major policy of the President Muhammadu Buhari administration.
Recall that the Nigerian Electricity Regulatory Commission, NERC, had on December 20, last year, rolled out a new tariff regime under its MYTO 2.1 for residential and industrial consumers, just as it equally abolished fixed charges.
Also speaking on the development, the Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors, ANED, Mr. Sunday Oduntan, explained that power sector growth would have remained elusive under the old tariff structure.
He said that the old tariff was not cost reflective, hence the operations of the Discos were almost grinding to a halt before the intervention of NERC with the new tariff structure, which, he said, was the only way to ensure that they remained in business.
He said, “If you want an improved service, we have to have a cost-reflective tariff. The required huge investment cannot happen without us having an appropriate pricing. That is the issue. We have been under-selling for a long time, and you can’t be selling a product that is supposed to be N100 at N60 and people are expecting improvement; that business will collapse.
“So, it is not about us increasing tariffs, it is about reviewing the tariffs upward to meet the operational cost of the business so that we will not continue to be in darkness perpetually.”
Oduntan lamented that some Nigerians were not enlightened enough to see the good intention behind tariff review, saying any attempt by consumers and other stakeholders alike to resist the implementation, is akin to returning the power sector to dark ages.
He hinted that, contrary to the belief that tariffs will continue to escalate, consumers, he said, will begin to heave a sigh of relief from the third year of the implementation of MYTO 2.1 because tariff rates, would begin to drop, because of improvements in power infrastructure across the power sector value chain, which included; generation, transmission and distribution
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