Nigeria Moves to Restructure Electricity Tariff Again, Says BandA Policy Not Working, DisCos Not Willing to Invest

The Federal Government of Nigeria envisages a major restructuring of the Nigeria electric tariff system, citing the slow migration to the customer’s band and the reluctance of electricity distribution companies (DISCO) to make the necessary investments in electric infrastructure.

This was revealed Thursday by the Minister of Power, Adebayo Adelabu, during the current public presentation of the national integrated electricity policy and the integrated resource plan in Nigeria in Abuja.

Adelabu described the enormous disparity between the rates of band A and band B as unfair, especially because the customers of band A are charged n209 per kilowatt hour for only two overtime of food, while the Bandeh B customers pay only n63 per kilowatt-hour.

“The gap between the group has prices and groups B, C, D and E is simply too wide,” said Adelabu. “We think it’s not fair. It is not only, and we must be able to carry out a certain level of regularization. »»

The federal government now offers a new pricing model that would reduce the price difference between the bands, in order to create a more balanced and fair price system.

However, this announcement has aroused concerns that the policy could end up as previous unsuccessful attempts to reform the sector, in particular the controversial band, a tariff hike which was initially promoted as the key to attract investments in the sector, but that has so far failed to do so.

The A band price system, introduced into the price model (SBT) based on services, was supposed to generate investments in the energy sector by allowing discos to invoice bonus rates in exchange for a minimum power supply of 20 hours guaranteed.

However, despite a significant increase in prices – protected by consumers – expected investments have not materialized.

According to industry experts, one of the main reasons for this lack of investment is the insufficient electricity production.

Currently, Nigeria generates just over 5,000 megawatts (MW) of electricity, well below the 30,000 MW necessary to ensure a stable power supply for the country’s growing population and economy.

This shortage of chronic power prevented the nightclubs from fulfilling their obligation to provide more than 20 hours of electricity to collect customers.

With limited electricity production, it is believed that discos have no incitement to invest in the upgrading of infrastructure, as they cannot guarantee enough supply to correspond to the band a premium price structure.

The government which is now pressure for another restructuring, concerns increases that this new policy could end up the group an experience – has been a solution but ultimately ineffective due to fundamental supply problems.

“Always remember to get people money,” said Jide Taiwo, a Nigerian consumer responding to the news. “Can this minister take a moment to think about how people can get the specified number of hours a day?” Check the @Ibedc_ng page, you will see daily excuses for unattended hours. Are they apologies from distribution companies? »»

Energy experts have warned that without first approaching the country’s production deficit, any attempt at tariff restructuring will only lead to more disputes between consumers, nightclubs and regulators.

The Nigerians fear that restructuring leads to greater electricity with a meager diet to show. This despite government insurance that pricing restructuring will not cause immediate price increases.

Adelabu’s comments reporting an imminent restructuring, the clamor for improving energy production becomes stronger. It is believed that without sufficient production of electricity, no new structure will take up long -standing challenges in the Nigeria electricity supply – because this would simply increase consumer costs without tangible advantages.

“The regularization of prices is one thing, but will there be a corresponding improvement in the power supply? The Nigerians deserve reliable electricity, not only the adjusted billing structures, “said Nigerian as a patience.