Prepare for Another Electricity Price Increase Within Months – Presidential aide

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Nigeria is bracing for another significant increase in electricity tariffs within the coming months, as announced by Olu Verheijen, Special Adviser to President Bola Tinubu on Energy. Speaking at the Africa Heads of State Energy Summit in Dar es Salaam, Tanzania, Verheijen emphasized the need for electricity prices to rise by approximately 66% for many customers to reflect the actual cost of power supply. This follows the Federal Government’s recent approval of a threefold tariff hike for Band A customers in April 2024.

Verheijen explained that the adjustment is crucial to address the financial challenges in Nigeria’s power sector. Higher tariffs, she noted, are necessary to fund maintenance, improve reliability, and attract private investment into power generation and transmission. However, she stressed the importance of balancing these increases with subsidies for less-affluent consumers to ensure affordability for vulnerable households.

Nigeria’s power sector faces significant hurdles, including inadequate infrastructure and insufficient investment. Despite having an installed capacity of 14 gigawatts, only eight gigawatts can be transmitted nationwide, with just four to five gigawatts reaching homes and businesses. This gap highlights the urgent need for reforms and investment to bridge the country’s energy deficit.

Verheijen reiterated the government’s commitment to transitioning to a cost-efficient yet cost-reflective tariff system. This approach aims to generate sufficient revenue to attract private capital while safeguarding the interests of low-income consumers. The goal is to create a sustainable energy sector capable of meeting Nigeria’s growing demand and supporting economic development.

In conclusion, the proposed tariff hike underscores the government’s efforts to address the financial and operational challenges in the power sector. While the increase may pose short-term challenges for consumers, it is seen as a necessary step toward long-term stability, improved service delivery, and increased private sector participation in Nigeria’s energy industry.

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