The Senate has advised the Federal Government against removing electricity subsidy or allowing a hike in tariffs. The resolution followed the consideration and approval of a motion, ‘Planned increase in electricity tariff and arbitrary billing of unmetered customers by Distribution Companies (DisCos)’. The motion was sponsored by Senator Aminu Iya Abbas (Adamawa Central).
The government last week said it was now ‘very difficult to sustain subsidy on electricity’.
Minister of Power, Adebayo Adelabu, said Nigeria must begin to move towards a cost-effective tariff model. According to him, the country was currently owes electricity generating companies N1.3 trillion and gas companies $1.3 billion.
Abbas, in his lead debate, said the ‘Senate notes with great dismay, plans to increase electricity tariff by the relevant statutory authority in gross disregard of increased economic challenges with attendant widespread poverty and high cost of living.
“The Senate may note that the Minister of Power was reported saying ‘the nation must begin to move towards a cost-effective tariff model, as the country is currently indebted to the tune of N1.3 trillion to generating companies (GenCos) and $1.3 billion owed gas companies.
“According to him, of the over N2 trillion needed for subsidy, only N450 billion was budgeted this year. The same electricity businesses are collecting money from customers for services not rendered. When they have not added anything to the equipment they inherited from PHCN. Communities buy transformers to replace damaged ones in addition to overburden bills and arbitrary estimates for unmetered customers.
“We note that the issue of arbitrary energy charges on unmetered customers has become worrisome given the February 2024 report of the Nigerian Electricity Regulatory Commission (NERC) on the non-compliance with energy billing caps by DisCos and the N10.5 billion penalty imposed on distribution companies that over-bill unmetered customers.
“In 2018, then Minister of Power, Works and Housing, directed the NERC to issue a regulation that facilitates signing of meter agreement between the ministry, Ziglaks company and other meter asset providers, to address the metering gaps in the power supply industry…”
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