The Minister of Power, Prof. Barth Nnaji, and some state governors held a town hall meeting with electricity consumers and stakeholders on Friday in Lagos.
Governor Babatunde Fashola of Lagos, in his presentation, argued that deregulation and decentralisation were the answer to the dwindling fortune of the power sector in the country.
He, however, questioned the provision of subsidy in the programme.
“You all will agree with me that except we deregulate the sector, power challenges may persist because the present tariff will dissuade investors from investing in the power sector,” Fashola said.
“But why is there subsidy in power sector? The adoption of uniform pricing is unrealistic based on disparity in the cost of production.”
Governor Babangida Aliyu of Niger, on his part, said the issue of electricity tariff was discussed at the National Economic Council (NEC) meeting and all the governors agreed that there should be a cost-reflective tariff in order to attract investors to the sector.
“Corruption is the challenge we are having in the power sector,” he said.
“Except the culprits are prosecuted, Nigerians may not have confidence in government policies. Right now, people are being charged for what they did not consume.”
Governor Issa Yuguda of Bauchi added that the new tariff would promote competition among investors, and would force down the tariff eventually.
Speaking for the Federal Government, Nnaji promised that the review of electricity tariff would not affect the poor.
The minister explained that under the new tariff regime, the urban poor and rural dwellers would now pay N4 per kilowatts as against N7 per kilowatts.
“All consumers that fall between R1 and R2, based on Multi-Year Tariff Order (MYTO) indices, will be exempted from monthly fixed charges,” he said.
“The R3 to L1 are expected to subsidise the urban poor and the rural dwellers through cross subsidy programme.”
He said the tariff would take effect from June 1, 2012.
The reviewed tariff has been generating mixed feelings among stakeholders, with most consumers calling for improved power generation before the introduction.
According to the Electricity Power Sector Reform (EPSR) Act 2005, electricity tariff will be reviewed every five years in order to ensure cost-reflective tariff and to protect all stakeholders’ interests. These include the consumers, the investors and the regulators.
