- Nigerians to pay more as FG ends monthly electricity subsidy payments
- FG to invest ₦43 billion in transmission and distribution subsectors in coming years
The Special Adviser to the President on infrastructure, Ahmed Zakari, disclosed that the Federal Government (FG) intends to stop the monthly electricity subsidy payment at a stakeholders’ engagement meeting, organised by the Nigerian Electricity Commission (NERC) in Lagos.
Last July, Vice President, Yemi Osinbajo, said the government expected the electricity sector to generate revenue from the power sector market. He also noted that the government would be investing over N43 billion in the coming years to improve transmission and distribution infrastructure across the country.
The power industry in Nigeria has reportedly been bogged down by claims of revenue shortfall allegedly due to a tariff regime that is “not cost-reflective.” Data from the Nigerian Bulk Electricity Trading Plc (NBET) shows that the tariff being collected by DisCos is below 50 per cent of their invoices.
The Association of Nigerian Electricity Distributors (ANED) had consistently lamented that the absence of a cost-reflective tariff remained one of the sector’s major setbacks.
Zakari stated that the “Federal Government intends to reduce its interventions in the power sector and thus allow the electricity market forces to determine the course of action.”
While deliberating, stakeholders argued that allowing market operators to determine the course of action means that Nigerians will pay the full commercial price for power as the generating and distribution companies determine.