'FG needs N3.2tn subsidy to reverse electricity tariff hike' - NERC

Federal Government will need to raise the sum of N3.2trn in 2024 to reverse the recent hike in electricity tariff.

The Chairman of the Nigeria Electricity Regulatory Commission, Sanusi Garba made this known in Abuja, while speaking at a stakeholders meeting convened by the House of Representatives Committee on Power on Thursday, April 18, 2024.

According to Garba, the current investment in the sector was not good enough to guarantee a steady power supply across the country.

He said, “If sitting back and doing nothing is the way to go, it would mean that the National Assembly and the Executive would have to provide about N3.2 trillion to pay for subsidy in 2024.”

Garba added that only N185bn of the N645bn subsidy in 2023 has been cash-backed, leaving a funding gap of N459.5bn.

The Chairman of the House Committee on Power, Victor Nwokolo stated the importance of the meeting was to address the recent increase in tariff and the various bands to which electricity consumers were recently categorised.

He said: “We have not concluded with them because the transmission company of Nigeria was not here and the generation companies too.

“We will hold further consultations with them by next week. But what they have said, which is true, is that without the change in tariff, which was due in 2022, the industry lacks the capital to bring the needed change.

“Of course, with the population explosion in Nigeria, the areas being covered are beyond what they estimated in the past and because they need to expand their network, they also need more money.

“Every day, there are changes to the exchange rate and there are also threats to power installations because of security, thereby increasing the overhead.

“The committee has not fully agreed with them because we are not saying either yes or no; we want to get more input and also find out the possibility of gas being sold to them in naira. More of this is dependent on generation and without the gas, you cannot have power.

“The committee cannot take any decision to stop the increase in tariff. That decision can only be taken by the entire House and not at the committee level. There must be a House resolution to stop it.”