This edition of the Power Sector Watch highlights some of the recent development in the Nigerian Power Sector:
Proposed Increase in Electricity Tariffs
The Nigerian Electricity Regulation Commission (NERC) informed that effective from 1 September 2021, Nigerians would be required to pay an increased electricity tariff.
This is in line with the already designed Service Based Tariff (SBT) structure, which was effected in 2020 by the Government in an attempt to address the electricity subsidy regime, as well as enable the Nigerian Electricity Supply Industry (NESI) generate funds finance the market and attract investments. The introduction of the SBT has resulted in a 50% increase in electricity cost. It is not clear though what impact the earlier moderation in tariffs have had on power supply.
Ayuba Wabba, the Nigeria Labour Congress (NLC) president apprised the Federal Government (FG) of its agreement with the Union to reduce the electricity tariff by ₦15 per KWH by December 2021. He further stated that Organised Labour, under the NLC, may embark on strike if the proposed increased tariffs become a reality. In the same statement, he further demanded a reduction of 40 percent in the gas price to Generating Companies (GenCos) from $2.50 to $1.50 per standard cubic feet (scf) whilst stating that the government’s approved reduction from $2.50 to $2.18 per scf fell short of their expectation, and breached the agreement reached with the NLC.