The Federal Government is telling Nigerians to expect another increase in the price of electricity. The Minister of Power, Adebayo Adelabu, in a statement signed by his spokesperson, Bolaji Tunji, on Monday said the new tariffs will reflect the true costs of electricity.
Here’s the main reason why:
The Real Cost of Electricity:
The government says that what we currently pay for electricity is less than what it actually costs to produce and supply it. They’ve been paying the extra money (called a subsidy) to keep our bills lower.
No More Subsidies:
The government is saying that Nigeria’s economy can no longer afford to keep paying these subsidies. So, they plan to start charging us closer to the actual cost of the electricity.
How Much We Pay Now:
Right now, the electricity regulator (NERC) says the average real cost of electricity is about ₦116 per kilowatt-hour. However, we, the consumers, are only being charged around ₦88 per kilowatt-hour on average. The government has been paying the difference.
Government’s Huge Debt:
The government already owes the companies that generate electricity (GenCos) a lot of money – over ₦4 trillion. This is because they haven’t fully paid the subsidies they promised.
What this means for you:
Essentially, the government is saying that because they can’t afford to keep paying the extra cost of electricity, we will likely see an increase in our monthly electricity bills soon.