Nigeria’s Power Stakeholders are now appealing for cost-reflective tariffs. This is in light of power distribution companies’ recent superior force declaration in the country.
“There is a need to change certain parameters that will force the system to work; a pricing system that can work,” the Managing Director and Chief Executive Officer of Benin Electricity Distribution, Mrs. Funke Osibodu said. According to the CEO Sahara Power Group, Mr. George Oluwande, the pricing system has led to power generation companies being owed more than a US $1bn.
The current Minister of Power, Works and Housing, Mr. Babatunde Fashola, oversaw an increase in the tariff after the Nigeria Electricity Regulatory Commission (NERC) announced a 45% increment in January 2016. However, investors in the privatization process say the rate is yet to reflect the cost of generating and distributing the invaluable commodity.
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Regulatory measures
Deputy Director and Project Manager of the Nigerian Power Reform Program Mr. Amaechi Aloke, said the Nigerian government was in favor of a price increase. On the other hand, he noted that any increase should spread over a period of time. This, according to him, is because of lack of stability in the market.
Mrs. Osibodu, who heads a Power Distribution company, urged the government to create a regulatory asset bond to back its intervention in the power sector. Such an instrument, she explained, will give private investors confidence that the government is committed to bettering the situation.
Meanwhile, Lagos State’s Commissioner for Energy and Mineral Resources, Mr. Olawale Oluwo, said restructuring the power sector program has become inevitable while advocating for the complete privatization and full divestment of government holdings in the sector.
