FG clarifies electricity tariff increase reports

FG clarifies electricity tariff increase reports

The Federal Government on Monday addressed recent media reports regarding a potential 65% increase in electricity tariffs.

Special Adviser to the President on Energy, Olu Verheijen emphasised that the reports misrepresented her earlier statements.

She clarified that while tariffs currently cover approximately 65% of the actual cost of electricity supply, the government remains committed to ensuring fair pricing without imposing immediate hikes.

Verheijen was quoted as saying during the Mission 300 Energy Summit in Dar es Salaam, Tanzania, that the current power tariffs would rise by about two-thirds.

She was further quoted as saying Nigeria’s power prices need to rise by about two-thirds for many customers in order to reflect the cost of supplying it, adding that an increase should be expected within months.

She explained that the higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance necessary to improve reliability and to attract private investors into power generation and transmission.

“Nigeria’s power prices need to rise by about two-thirds for many customers to reflect the cost of supplying it. Higher electricity tariffs, which need to be balanced by subsidies for less-affluent consumers, are required to fund the maintenance needed to improve reliability and to attract private investors into power generation and transmission.

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“One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff,” Bloomberg quoted Verheijen as saying.

But in a statement she personally signed, she stressed that at the forefront of the government’s strategy is the Presidential Metering Initiative (PMI), which aims to roll out 7 million prepaid smart meters across the country starting in 2025.

The initiative is designed to eliminate the long-standing practice of estimated billing that has plagued consumers.

“This rollout will empower consumers by providing them with accurate billing based on their actual usage, thereby enhancing transparency in electricity charges,” Verheijen stated.

She added that the introduction of smart meters is expected not only to boost consumer confidence but also to improve revenue collection within the power sector, facilitating much-needed investments in Nigeria’s energy infrastructure.

In addition to metering reforms, the Federal Government is actively working on restructuring its electricity subsidy programme.

FG clarifies electricity tariff increase reports