No going back on electricity tariff hike – Fashola
The Senate Joint Committee on Labour, Employment and Productivity; Power, Steel Development and Metallurgy, yesterday, grilled the Minister of Power, Works and Housing, Mr. Babatunde Fashola and the executive chairman of Nigerian Electricity Regulatory Commission (NERC), Mr. Anthony Acka, following Federal Government's refusal to halt the new electricity tariff.
The Senate, had in February, soon after the new electricity tariff regime came into effect, passed a resolution, calling on the Federal Government to halt the implementation, pending the resolution of some grey areas.
But addressing lawmakers, Fashola said Federal Government will not go back on the 45 per cent increase, adding that a reversal will cost over N575 billion.
He explained that the new tariff was necessary for the market to survive adding that a number of indices, such as borrowing rate for investors, exchange rate , availability and cost of gas, among others also contributed to the hike.
'One of the reasons why the tariff had to go up was that a major component, a significant number of our power plant depends on gas and out of about 26 power plants that 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 four dollars and it was selling for domestic use at one dollar.'
The minister said even with the recent hike in electricity tariff, Nigeria was still among countries with the lowest electricity tariffs in Africa and the world.
He added that since 2005 when the power privatization process started till 2013 when it was concluded, every segment of government was involved and would share the blame if there was any failure.
'Enabling laws for the process were passed by the National Assembly in 2005, the process completed by the Executive in 2013: if the process was bad, where was oversight?'' he asked.
He pleaded with the lawmakers and Nigerians to be more patient with government and investors on the process as three years was not enough to judge its success or failure.
Fashola said the powers to unilaterally increase electricity tariffs had been vested with NERC. He said the same National Assembly that enacted NERC Act cannot exercise control over tariff increment. - The Sun.