Nigeria to hike electricity tariff from July – power minister
Electricity consumers across the country are expected to pay more for energy consumption from July, according to the minister of power, Sale Mamman, who said government is no longer willing and able to continue the subsidy on energy consumption in the country.
Mamman stated this while appearing before the Senate Investigative Public Hearing on Power Sector Recovery Plan and the impact of COVID-19 pandemic organised by the Senate Committee on Power.
He said the ministry has concluded consultations with stakeholders in the energy sector on tariff review and has concluded plans to hike the cost of energy consumptions in the country.
The planned hike, which he said was initially targeted to take off in April was delayed for three months due to the outbreak of coronavirus and the restrictions imposed to contain the spread of the disease.
“The impact of this means the subsidy being incurred in maintaining the current tariff level had to be maintained until July 2020 when the proposed tariff review will be implemented,” the minister told the panel.
“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 right of way acquisition and environmental impact mitigation.
“The fund should be provided for in 2020, 2021, and 2022 Appropriation of the Ministry of Power.”
Mamman also said the COVID-19 pandemic had had a great economic impact not just on the health sector but on the overall economy.
“Indeed, the prevalence of the pandemic has already reduced productivity due to the strategy adopted globally to contain it.
“This by default affects the purchasing power of consumers and the demand for electricity in general.
“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.
He added that the power sector was also grappling with the challenges of infrastructural misalignment, market inefficiency/transparency, sector governance/policy coordination, and completion of legacy projects.