Increase In Electricity Tariff Cannot Be Reversed– Fashola

By Ikenga Chronicles June 1, 2016

Increase In Electricity Tariff Cannot Be Reversed– Fashola

The Minister of Power,Works and Housing Babatunde Fashola has stated that the 45% increase in electricity tariff announced in January by the Nigeria Electricity Regulatory Commission(NERC) cannot be reversed.

Fashola stated this when he and the acting Chairman of NERC Dr. Anthony Akah addressed the Senate’s Joint Committee on Labour and Power, during a public hearing session.

The Senate had earlier in the year mandated that a reversal of the hike be effected– a mandate that was not heeded.

In explaining why the mandate was disregarded,the NERC boss told the joint committee that obeying such directive would have created series of avoidable setbacks in the sector like a market gap of about N575billion which would have compounded the initial market gap of N187billion the take off tariff slammed on investors.

He stated that, six generating companies (GENCOs) had before the Senate’s resolution, taken NERC to court over the tariff hike but stated that such actions would not lead to a reversal since the process of increasing the tariff was in compliance with section 76 sub-section 8 of the Act guiding the operations of the commission.

The NERC boss’ submission was supported by Babatunde Fashola who pointed out that the sector needed the market reflective tariff to survive.He stated that basket of indices led to the hike like borrowing rate for the investors, exchange rate, availability and cost of gas.

“One of the reasons why the tariff was increased was that a major component, a significant number of our power plant depends on gas out of about 26 power plants that we have only about three are hydro.We were heavily dependent on gas, people were exporting gas because gas was selling outside the country at $4 and it was selling for domestic use at $1.30, government review that price to of $3 .30 and it is the primary component for manufacturing.Power has come up it should make sense unless government decides to subsidise it” Fashola explained.

The Minister further explained that despite th recent hike in electricity tariff, Nigeria is still one of the countries with the lowest tariffs in the world.

The Chairmen of the joint committees, Nazif Suleiman and James Manager along with their members, insisted that the tariff as at present, without commensurate power supply to Nigerians,unacceptable .

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