The Federal Government on Friday in Lagos assured Nigerians that the review of electricity tariff would not affect the poor.
The Minister of Power, Prof. Barth Nnaji, said at a town hall meeting he held with consumers and stakeholders in Lagos that the poor would pay less compared to their current bill.
Nnaji said 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.
“The R3 to L1 are expected to subsidise the urban poor and the rural dwellers through cross subsidy programme,’’ he explained.
He said the tariff would take effect from June 1st, 2012.
NAN recalls that the reviewed tariff had generated a lot of mixed feelings among the stakeholders, who called for improved power generation before the introduction.
Gov. Babatunde Fashola of Lagos in his presentation argued that deregulation and decentralisation was 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.
“But why is there subsidy in power sector? The adoption of uniform pricing is unrealistic based on disparity in the cost of production,” Fashola said.
Gov. Babangida Aliyu of Niger said that the issue of electricity tariff was discussed at the National Economic Council (NEC) meeting.
Aliyu added that 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. 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.”
Gov. Issa Yuguda of Bauchi argued that the new tariff would promote competition among investors, adding that the development would force down the tariff on the long run.
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.