Electricity Tarrif Increase: No Going Back —FG

Minister of Power, Works and Housing, Babatunde Raji Fashola

THE Federal Government, on Tuesday, insisted that there was no going back on the recently approved 45 per cent increase on electricity tariffs.

Minister of Power, Works And Housing, Mr Babatunde Fashola, who spoke on behalf of the government while appearing before the Joint Senate Committee in Power, Employment, Labour and Productivity, said that any attempt to reverse the 45 per cent increment would spell doom for the power sector.

Fashola, who was accompanied to the public hearing by the acting chairman, Nigeria Electricity Regulatory Commission (NERC), Dr Anthony Akah, further insisted that available facts at the government’s disposal showed that we heard that adequate consultations were made among the stakeholders before the NERC approved the increment.

He also said that it was hasty to condemn the power privatisation process consummated under the administration of former President Goodluck Jonathan in 2013.

He also denied insinuations that the Federal Government was over defending the 45 per cent tariff regime, adding that the variables in the power value chain were all critically examined before the increment was announced.

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Fashola also said that the current power crisis being experienced in the country was attributable to activities of some militants, whom he said were carrying out economic sabotage.

The minister said: “Let me say again with all relevances and for the purpose of those who will benefit from this public hearing, that today, there is no PHCN anymore and we must migrate, because we have moved on from it.

“As minister, I inherited a power sector, where government’s interest had been illegally sold and, therefore, I don’t control how power is distributed, I don’t control how power is generated, as it was possible to do in the past.

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“They are now largely private businesses, except those where government now has some minority shares and so, government is now minority shareholder in businesses where it was majority shareholder and we can only exercise collaborative pressure to get things done, but things must be done now on a commercial basis.

“Government’s control is limited and it is largely exercising regulatory activities through the NERC, which sets the tariff; so my interventions here would be largely to express why I support what NERC has done and to help amplify my understanding of it.

“The DISCOS were making it very clear to us that if we did not give them the market reflective tariff; it means that government would have to carry the continuing cost that accumulated in the region of about a trillion naira.”

According to him, the reversal carried out in 2015 in the sector was mainly for political reasons, adding that the decision significantly increased the nation’s debt in the sector.

He added: “We are not insensitive to Nigerians owing to their challenges. We are looking for the best way to solve what had become an over 60 years problem, since 1950, when Electricity Company of Nigeria was first created.

“One of the reasons it (tariff) has to go up was that a major component, a significant number of our power plant depends on gas. Out of about 26 power plants we have, only about three are hydro.

“We were heavily dependent on gas, people were exporting gas because gas was selling outside the country at $4 and it was selling for domestic use at $1. Government reviewed that price to a total of $3.”

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Acting NERC chairman, who also spoke before the Senate Joint Committee, said a painstaking process was embarked upon by the commission before decisions were taken.

He also said that the Labour unions, including the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), were involved in the negotiations that led to the increment.

Representatives of the TUC and the Comrade Joe Ajaero-led NLC, Comrade Chris Okonkwo, however, submitted that the nation’s electricity supply was better off before the tariff hike than now.

Many of the lawmakers, who also spoke at the hearing, said that the power situation in the country was lamentable, as they also asked the government to desist from protecting the power firms.

They also asked minister and heads of agencies to rise to the challenge by restoring the people’s confidence in the power sector.



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