NERC Calls For Abolition Of Electricity Tariff Subsidy, Says It Gulped 540bn In 2019

The Nigerian Electricity Regulatory Commission (NERC) has called for the abolition of electricity tariff subsidy and has advised that money meant for the subsidy be channeled to other sectors of the economy such as health and education.

In a statement by it Chairman, Sanusi Garba, NERC said in 2019 the Federal Government spent N540bn subsidising electricity.

The Commission also advocated for service reflective tariffs so that people will pay for the electricity they consume.

He said the tariff review has been shifted two times and such is not in the best of the country

“The time of the review has actually been shifted twice, in consideration of the exigencies that obstructed everybody, particularly the COVID-19 pandemic and other situations.

“But you cannot continue to defer the review indefinitely because you should look at electricity supply as a value chain. Generation companies are spending money to produce electricity and TCN (Transmission Company of Nigeria) is transmitting that electricity to the distribution companies.” NERC said

NERC added that electricity is a commodity somebody has to pay for and rates review cannot be postponed indefinitely.

“If you continue to defer the rates review, unless government has the resources to fill in the gap, the implication is that you will see service plummeting significantly.

“This is because at the end of the day, the generators will not be paid. And if the generation companies are not paid, it means that they will not be able to pay for gas. And so the 3,000 megawatts, 4,000MW and occasionally 5,000MW that we are getting now will significantly come down.” NERC said