Nigerian Senate to Meet with Power Minister Over 300% Electricity Tariff Hike

The Nigerian Senate plans to meet with the Minister of Power and other stakeholders on May 2nd to discuss the recent 300% electricity tariff hike for Band A consumers in Nigeria. The tariff increase, which took effect on April 1, 2024, raised prices from N68 to N225 per kilowatt hour.

The Senate has prepared invitation letters to the stakeholders and intends to hold the meeting next Wednesday after resuming from its recess on April 30. Senate spokesperson Ajibola Basiru promised that the Senate will not abandon Nigerians or show indifference to any policy that adds to their economic hardship. The Senate is looking into the matter and wants to hear from the stakeholders before deciding on the next course of action.

The Nigeria Electricity Regulatory Commission (NERC) has defended the tariff hike, stating it is necessary to prevent the sector from complete collapse due to insufficient investments and liquidity challenges. NERC Chairman Sanusi Garba explained that current investments in the sector are not enough to guarantee steady power supply, and a total sectoral overhaul is needed, including addressing fluctuations in foreign exchange.

Why this matters: The electricity tariff hike has sparked outrage among Nigerians already struggling with economic hardship. The Senate's intervention aims to address the concerns of citizens and find a balance between the needs of the power sector and the welfare of the people.

According to Garba, the Federal Government would need to provide N3.2 trillion in 2024 to reverse the tariff hike. He warned that if issues like non-payment for gas are not addressed, the power sector will face a crisis. NERC Vice Chairman Musiliu Oseni clarified that the rate increase will only affect 15% of electricity customers in the country, who consume 40% of the nation's electricity.

The House of Representatives Committee on Power has also acknowledged the need to address the tariff increase and categorization issues, particularly regarding Band A and other consumer categories. The committee plans to hold further consultations with the Transmission Company of Nigeria and generation companies next week to get more input and explore the possibility of selling gas to them in naira. However, the committee cannot take any decision to stop the tariff increase, as that can only be done by the entire House through a resolution.

Regional organizations such as the Northern Elders Forum (NEF) have strongly criticized the tariff hike, calling it a "reckless move" that displays a "complete disregard for the well-being and welfare of the Nigerian people." The pan-Yoruba socio-cultural organization Afenifere and the Association of Senior Civil Servants of Nigeria (ASCSN) have also rejected the increase, urging the government to focus on improving electricity supply before considering any price adjustments.

Key Takeaways

• Nigerian Senate to meet with Power Minister on 300% electricity tariff hike
• NERC defends tariff hike, says N3.2T needed to reverse it and prevent sector collapse
• Tariff hike affects 15% of customers consuming 40% of Nigeria's electricity
• House of Reps committee to consult on tariff issues, but cannot stop increase
• Regional groups criticize tariff hike, urge focus on improving power supply first