By Precious Eyo

In Abuja, Sanusi Garba, Chairman of the Nigeria Electricity Regulatory Commission (NERC), revealed that the Federal Government would require N3.2 trillion in 2024 to roll back the recent electricity tariff hike. Garba made this disclosure during a stakeholders’ meeting organized by the House of Representatives Committee on Power.

Garba emphasized that while current investments in the sector are commendable, they fall short of ensuring a consistent power supply nationwide. He highlighted the need for comprehensive sectoral reforms, citing challenges such as foreign exchange fluctuations that impact power supply in Nigeria.

Before the recent tariff review, distribution companies were obligated to pay only 10% of their energy invoice, leading to liquidity challenges in the sector. Garba noted that between January 2020 and January 2023, electricity tariffs increased from 55% to 94%, with current inflationary pressures pushing the cost reflective tariff to N184/kWh.

Addressing the funding gap, Garba stated that only N185 billion of the N645 billion subsidy in 2023 has been cash-backed, leaving a shortfall of N459.5 billion.

Musiliu Oseni, Vice Chairman of NERC, defended the tariff increase as necessary to prevent a total shutdown of the sector.

Victor Nwokolo, Chairman of the House Committee on Power, emphasized the need for further consultations on the recent tariff hike and consumer categorization. He acknowledged the challenges faced by the sector, including population growth and security threats to power installations.

Nwokolo clarified that the committee cannot unilaterally halt the tariff increase, as such a decision requires a resolution by the entire House of Representatives. He affirmed the committee’s commitment to gathering more input before reaching a decision