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The federal government has
completed plans to almost
double the cost of electricity
from April 1, 2012.
A kilowatt hour of electricity,
which costs consumers N10
currently, will soon cost about
N19, an increase of 88 per cent.
According to a report by the
Financial Times yesterday, the
new rates would be announced
before the privatisation of the
18 power generation,
distribution and transmission
companies this year.
The newspaper quoted the
federal government as saying
that higher "cost-reflective
tariffs" for residential and
commercial electricity customers
were necessary to ensure that
investors could make profits.
Under the new pricing regime,
tariffs will rise 25 to 88 per
cent, though most customer
classes will see a 50 per cent
increase in their bills. The
government hopes that
cushioning the blow on the
poorest consumers - a policy
absent during the fuel subsidy
removal - will ensure that there
is no repeat of the public outcry.
"We are making sure that the
urban poor and rural dwellers be
provided a subsidy so that they
don't see a significant increase
in tariff," Bart Nnaji, the minister
of power, told the Financial
Times in an interview in Abuja.
"The rest should be able to pay
for it."
The chairman of the Nigerian
Electricity Regulatory
Commission (NERC), Dr. Sam
Amadi, confirmed the report in
an interview with LEADERSHIP
yesterday.
Amadi said, however, that not all
customers would have their
tariff increased by 88 per cent.
According to the NERC chairman,
customers are classified based
on energy consumption, the
type of metering and cost of
service.
He said: "When people upgrade
and consume more power, their
consumption level will spike and
the distribution company will
automatically migrate the
customer to a higher customer
class, and they will pay more."
Despite having large reserves of
natural gas that can fire thermal
plants, the country's electricity
supply and service is among the
world's worst, with half of the
160m population lacking access
to the grid. Peak output is little
over 4,000MW, with per capita
consumption just 3 per cent of
that of South Africa, Nigeria's
rival for the continent's biggest
economy.
Frequent blackouts mean that
most of Nigeria's power comes
from privately owned petrol
and diesel generators, greatly
increasing business costs and
deterring potential investors. It
is hoped that privatisation will
greatly improve service and
output, with the government
targeting 18,000MW output by
2016.
The new tariff was calculated to
reflect the real cost of supplying
electricity, with a return of
investment factored in,
according to the NERC. This
comes to about N23 per kWh,
which Nnaji said was near the
average price in Africa and less
than half the cost of self-
generated power in Nigeria.
The biggest consumers of
electricity, wealthy individuals
and businesses, will pay the
highest rates, cross-subsidising
the less well-off. The
government will also provide a
N60 billion subsidy this year,
allowing the tariff for the
poorest customers to be fixed
at N3.3.


may God help us nd save us from our leaders bcos they no even know dat most people in nigeria is sufring alot
Our Leaders are heart-less and gluttonous.
Call for Total Cure from all diseases on 08079549042 / doctorgem77@gmail.com .



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