BEVERLY HILLS, October 04, (THEWILL) – The Nigerian Electricity Regulatory Commission (NERC) has called for the abolition of subsidy on electricity tariff
While calling for service reflective tariffs, the Commission advised that money meant for subsidy be channeled to other sectors of the economy.
In a statement by the Commission, the Chairman, Sanusi Garba said that the Federal Government spent N540bn subsidizing electricity in 2019. “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”, the statement added.
The Commission further said 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 the 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”, the statement added.
