By Kayode Araba.
Thus, the Chairman of the Nigeria Electricity
Regulatory Commission (NERC), Sanusi Garba said in Abuja that the Nigerian Government would have to provide N3.2 trillion as subsidy for the electricity sector in 2024 if the recent increase in tarif to be reversed.
However, speaking at a stakeholders meeting called by the House of Representatives committee on Power, Garba said that current investments in the sector was not enough to guarantee steady power supply.
He further alluded to the fact that if nothing concrete is done to address issues in the sector including foreign exchange Flutuarion and none payment for gas, the sector will be heading for doom.
And, he explained that prior to the recent review in tarrif, DISCOS were only obligated to pay 10 percent of their energy invoice, adding that the lack of cash backing for subsidy is creating a liquidity challenge in the sector.
In addition, he explain further that as a result of the none payment of subsidy, gas supply and power generation have continued to dip, adding that the continuous decline of generation and system collapse are largely linked to liquidity challenge.
Therefore, he raised an alarm of what he called a looking risk not total shut down by the Generation and distribution companies, achieving cost effective tarrif is key to the sustainability of the sector.
Also he said that between January 2020 abe January 2923, tarrif increased from 55 percent of cost to 94 percent lt cost recovery, adding that “the unification of FX and current inflationary pressure are pushing cost reflective tarrif to N184/kwh.
