By Kolawole Ojebisi
There are indications that the high costs of living confronting many Nigerians may worsen in weeks to come as the Federal Government has hinted that there are plans underway to increase electricity tariffs “over the next few months”.
It, however, said that the planned increase needed to be balanced by subsidies for less-affluent electricity users.
This is coming amid biting economy , informed by government’s policies, and reflected in growing cost of living and other challenges confronting Nigerians.
Bloomberg quoted the Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, as giving this hint at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, where Nigeria presented a $32 billion plan to expand electricity connections by 2030.
According to the presidential aide, Nigeria is trying to resolve the transition to a cost-efficient but cost-reflective tariff to attract private investors.
She said: “One of the key challenges we’re looking to resolve over the next few months is transitioning to a cost-efficient but cost-reflective tariff.
“So the sector generates revenue required to attract private capital, while also protecting the poor and vulnerable.”
She also highlighted that Nigeria’s power industry requires significant investment to meet its development goals.
The aide said out of the country’s 14 gigawatts of installed power, only eight gigawatts can be transmitted nationwide, while just four or five gigawatts can be directly delivered to homes and businesses.
“Your energy policies have to be closely linked with your own ambition for your country,” Verheijen said.
Last year, the federal government approved a threefold increase in electricity tariff for customers under the Band A classification.
The fresh move to raise tariffs comes amid mounting pressure from Nigeria’s debt-burdened electricity distribution companies for tariffs to be cost-reflective so they can improve their finances.
