The Presidential candidate of the Young Peoples Party (YPP) in the 2019 general elections, Kingsley Moghalu, has thrown his weight behind the review of the electricity tariffs in the country.
The Distribution Companies (DisCos) in Nigeria since Tuesday have been informing their customers about an upward review of electricity tariff, but President Muhammadu Buhari has insisted that any review must be based on improved service while poor and vulnerable Nigerians should not pay more in all cases. The President has also ordered mass metering in the country and directed an end of estimated billing.
The Nigerian Electricity Regulatory Commission (NERC) in an official statement last week said “Following consultations and directions on tariff policy, the Commission (NERC) hereby approves a deferment of the applicable tariffs for customers in service band D and E (that is customers with a service commitment of less than an average of 12 hours supply per day over a period of one month) for the period 1st September 2020 to 1st January 2021.”
Speaking during a live programme on Channels TV, Politics today, anchored by Seun Okinbaloye, Moghalu said that the hike in electricity “has been a long time problem for Nigeria and it is understandable why there will be a hike in price of electricity prices.
“The estimated cost of electricity in Nigeria is 53 naira per Kilowatt hour and what Nigerians have been paying is 31 naira per kilowatt hour, which means, there is a subsidy of about 22 naira.”
He lamented that the subsidy has cost the federal government of Nigeria this year alone about 560 billion Naira which is about 1.5 billion dollars and that is 7 percent of the budget for 2019. Indeed in the last 5 years the FG has paid over 1.5Trn to close the liquidity problem in the power sector.
“The problem with the tariffs and the subsidy on the tariffs is that it prevents the sector which has been privatized from being commercially viable and increasing its capacity or the capacity of private sector operators to be able to provide more electricity to Nigerians,” he noted.
The former CBN deputy Governor, however, regretted that the effects of Covid- 19 and fall in oil prices has weakened the government in a fundamental way from being able to continue providing subsidies.