New electricity tariff: Fashola justifies increment

New electricity tariff: Fashola justifies increment

Minister of power, works and housing,  Fashola, on Tuesday, February 2 said the increment in electricity tariff will improve power supply.

Fashola said this when he appeared before the Senate committee on power, to defend the budget of the ministry.

New electricity tariff: Fashola justifies increment
Fashola during his screening at the Senate last year

He said that investors would pull out if they were not able to get returns on their investments.

‎He said that the Senate had empowered the Nigerian Electricity Regulatory Commission (NERC) to determine tariff for electricity and as such, the increment was not unlawful.

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‎"E‎lectricity is a product, it is made from raw materials and some of the raw materials are gas.‎ So, the issue of tariff is the single issue of price, when the raw materials of course will go up the price cannot stay the same.

"You may ask why can’t we have more power before the price goes up: I am also a consumer, but we see that investments in power are not where they should be.

"If the recovery of price,  the income and profit do not make economic sense to the investor, would you do that business if you are the one?

"So it is not what I want, it is what I think will solve the problem, everybody is owing everybody in the power equation and they are also owing banks.

"Now if you want investment in power, banks must continue to see confidence to lend.

"There are a lot of investors who want to pay a little more than the open market tariff, if we want them to come into the industry we have to allow the new tariff order," he said.

Fashola told the committee that there were  lots  of people producing excess power, who also want to join the national grid if the price was right.

He said that the tariff was necessary as the former government was perhaps afraid to confront Nigerians with the real price of electricity, hence the increment in tariff every two years.

However, he assured that the new tariff was a ten-year policy that would not be reviewed upwards or downwards.

"This tariff order also removes fixed charges, the consumers say they do not want fixed charges: nobody likes fixed charges because they want to pay for what they use.

"So, it gives the consumer something and it gives the service provider something too so that we can see increment.

"Government has bought out the issue of generation of power so people will not go into generation of power if it is not a business from which they can make a recovery and some profit.

''The law passed by the National Assembly clearly gives NERC the responsibility and power to give a tariff that enables them to recover their investment and returns on investment.

''So nothing unlawful or illegal has happened, one thing we must however begin to embrace is conservation,'' he said.

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Legit.ng recalls that the (NERC) on Monday, February 1 effected the new electricity price tariff .‎ NERC boss, Dr. Anthony Akah, had stressed that there is no going back on the new tariffs.

Source: Legit.ng

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Khadijah Thabit (Copyeditor) Khadijah Thabit is an editor with over 3 years of experience editing and managing contents such as articles, blogs, newsletters and social leads. She has a BA in English and Literary Studies from the University of Ibadan, Nigeria. Khadijah joined Legit.ng in September 2020 as a copyeditor and proofreader for the Human Interest, Current Affairs, Business, Sports and PR desks. As a grammar police, she develops her skills by reading novels and dictionaries. Email: khadeeejathabit@gmail.com