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Nairaland Forum / Nairaland / General / Politics / Yar’adua Approves Higher Electricity Tariff (8170 Views)
NERC Set To Release New Electricity Tariff / Prof Osinbajo – Nigerians Should Expect Higher Electricity Tarrifs / FG Tells Nigerians To Brace Up For New Higher Electricity Bills. (2) (3) (4)
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Yar’adua Approves Higher Electricity Tariff by Kobojunkie: 9:54am On May 01, 2008 |
By Ihuoma Chiedozie, Abujawww.punchng.com/Articl.aspx?theartic=Art20080501071321 |
Re: Yar’adua Approves Higher Electricity Tariff by wendymanda: 10:01am On May 01, 2008 |
“It is expected that with the full implementation of the MYTO, the current situation in which the power industry is unable to generate enough revenue to cover its operating costs, undertake regular maintenance and make new investments, will become a thing of the past.It is expected hmm. At this point shouldn't it be beyond expectations? He should also try investing in solar energy seeing as it is just expected.
He wishes as if it is Santa Clause he is trying to conjure up had they been doing everything possible power disruption would not be so rampant. They are actually doing everything possible in his house because if he realized the need for constant power supply they would not be so far behind. |
Re: Yar’adua Approves Higher Electricity Tariff by texazzpete(m): 2:08pm On May 01, 2008 |
Why incresae tariffs when we're getting terrible electricity supply? I'm not too keen even with government's promise to subsidize the tariffs. We all know how the fuel subsidies have been used by the federal government as an excuse to jack up the price of fuel in the past. |
Re: Yar’adua Approves Higher Electricity Tariff by Eziachi: 3:57pm On May 01, 2008 |
When was the last time Dumb-Ass Yar Adua paid an electricity bill and from his pocket? I bet he can't remember, come rain come sunshine, there will always be electricity for free for him and his privilege family. So why should he worry about higher tarriff for his slaves? |
Re: Yar’adua Approves Higher Electricity Tariff by Tonim(f): 4:57pm On May 01, 2008 |
Kobojunkie: Who are the people advising Yar'Adua for goodness sake ? Now, the federal govt has to help subsidize electricity for consumers ? Have Nigerians ever complained of not being able to pay their electric bills ? This step by Yar'Adua has just set us back in our drive towards privatizing the power sector. Really pitiful |
Re: Yar’adua Approves Higher Electricity Tariff by Kobojunkie: 5:11pm On May 01, 2008 |
I am going to take a guess here and say that the subsidies are for investors, companies willing to come in to provide electricity to the people. Like you pointed out, subsidies do not make much sense when a) there is rarely electricity to the customers and b) when people are not necessarily complaining that they can not pay for it. |
Re: Yar’adua Approves Higher Electricity Tariff by 4Play(m): 5:25pm On May 01, 2008 |
The subsidies are for consumers.Basically,to cushion the inflationary effects of such a price rise. We are in a catch-22 situation;we can't get investors in unless tariffs are raised to levels that will make the sector attractive to them but simultaneously,raising tariffs punishes consumers who have been reeling under epileptic power supply. |
Re: Yar’adua Approves Higher Electricity Tariff by Tonim(f): 7:43pm On May 01, 2008 |
The govt shouldn't even be involved with electricity tariff. That should be left to the private sector ( generating/distributing firms). If the govt fixed the tariff in the telecoms sector, we wouldn't see the tremendous success attained there. Until we embrace complete privatization of the power sector, I'm afraid we will never attain the goal of sufficient power supply in Nigeria. |
Re: Yar’adua Approves Higher Electricity Tariff by SkyBlue1: 9:30am On May 03, 2008 |
Nigeria: Power Supply - Abuja to Get 1,300 Mw - Modibbo FCT administration is working on its Independent Power Project to complement what is being provided from the national grid by the Power Holding Company of Nigeria (PHCN). FCT minister, Dr. Aliyu Modibbo Umar, made this disclosure while briefing the FCT executive committee members on the state of power supply to the Federal Capital Territory. The minister stated that the presidency, the FCT administration and a Korean firm are involved but that, President Umar Musa Yar'Adua, has been a catalyst to the project by personally inviting the Koreans to Abuja. According to him, the project is expected to produce 1,300 megawatts of electricity that will be solely dedicated to the Territory, considering its importance to the socio-economic development of the country. The minister revealed that the Independent Power Plant would be sited in Gwagwalada, remarking that the FCTA was already in the process of handing over the site to the Korean firm to enable them commence work. He stated that there cannot be meaningful development without a solid power supply to any modern city like Abuja. His words: "We are determined to break the jinx because we must make a difference in the Federal Capital Territory, if we must be taken seriously as city managers. "President Yar'Adua went out of his way, to personally invite the Koreans knowing fully well that it is only through strong power base that sound economic activities can be gingered", he stressed. Umar reiterated that the dream was realisable since the process was being driven by the private sector, who could manage such important and gigantic project going by what had been happening in the advanced countries of the world. He assured that his administration will not leave any stone unturned since as city managers, "we are at the receiving end of poor power supply". http://allafrica.com/stories/200805020428.html |
Re: Yar’adua Approves Higher Electricity Tariff by SkyBlue1: 9:36am On May 03, 2008 |
I didn't want to start a new thread for this that is why i put it up here. There is also another news article i read through about 4 days ago but unfortunately i can't find it and i was a bit hesitant on posting it at first. Basically a company apparently wants to use Enugu's coal reserves to develop a plant which is capable of 10000MW to that part of Nigeria and are saying given the Nigerian factor of bad infrastructure and even with almost everything needing to be imported, the first stage of the project (the core part) which would deliver something like 1000MW can be completed in two years and after that, adding an extra 1000MW can be done in something like every two months to expand the capacity. I just need to highlight this for people who have been implying that we need decades to begin to tackle the power sector to see that that excuse has just been rhetoric without trying to genuinely tackle the problem. Imagine something like this happening up and down the country, then how long would it take to fix the power problem? To be honest, at this point i really think states should be striving to generate their own power instead of waiting for Yaradua. I think Lagos state governor is addressing the issue in Lagos. More than any city at this point in time, Lagos needs power and fixing that alone would have a very huge impact on the lagos economy and and even better, the Nigerian economy. |
Re: Yar’adua Approves Higher Electricity Tariff by cola: 12:07pm On May 03, 2008 |
Seriousl some guys aren't for real. The one person in my opinion whos has got it half right is 4play. With the current tariffs, no investor nor fund lender will be convinced the venture will be profitable. Solution? Raise tariff. But then how can you raise tariff in a situation where supply is at best dissmal (never mind that the people are mostly poor) Solution? Consumers don't get to pay the increament (at least until supply improves remarkably). So the govt picks up the bill for the differential. So it's not exactly a catch-22 scenario here. Are subsidies and privatization mutually exclusive? NO. Subsidies and privatization can complement in certain situations like this. Guys here have always suggested a GSM-revolution like case for the power sector. Now the govt is trying to do something in that line, same guys are here complaining. It sounds a good idea. My hope is that it works - not made a stillborn by inherent systemic corruption. |
Re: Yar’adua Approves Higher Electricity Tariff by SkyBlue1: 12:23pm On May 03, 2008 |
@cola, to be honest at this point i am just glad to know that Yaradua is not a corpse and can instigate his own ideas. However this whole thing is based on the assumption that NEPA is not corrupt and all the money people pay in bills actually goes to NEPA. Now this is simply not true! Does NEPA read your meter before they charge you? Because a lot of the times they don't read meters and the people writing up the bill write it up when they get to your house and the bills are actually inflated. Then part of the money is simply split by some officials and there have been very wide spread reports about this going on. This is just a segment that capsulates yet another corrupt Nigerian agency so will increasing the bill change this significantly? Privatisation is needed in the power sector because then when people vote with their feet due to competition then power providers would have to improve the quality of their services. NEPA has fought so doggedly against privatisation because they know the implications of it and there will be no more avenue for looting. I really do believe one way to go is for the government to provide some of the infrastructure for power supply and sell it off to competent companies |
Re: Yar’adua Approves Higher Electricity Tariff by Tonim(f): 12:32pm On May 03, 2008 |
Sky Blue: Excellent points sky blue ! I was just going to write a response similar to yours when I stumbled on your post. You see, the subsidies by the govt can never work because of corruption. Officials are just going to share the money as sky blue has rightly stated. We have to privatize the power sector; govt should not be involved with determining how much consumers should pay for electricity. It is a daunting task (privatizing), but it is necessary to attain an efficient, well functioning power sector. Sky Blue: You have said it all ! It is as simple as that !!!! OBJ's economic team had a blueprint to this effect, but it appears Yar'Adua is abandoning it with his so-called power task force being the stumbling block. |
Re: Yar’adua Approves Higher Electricity Tariff by nazzyon(m): 12:44pm On May 03, 2008 |
I am presently on the prepaid service because I couldn't stand seeing me get cheated anymore. And when I am back in school I will work toward setting up my Solar supply. Soon all these stories will be "Afi seyin legun fi asho" |
Re: Yar’adua Approves Higher Electricity Tariff by oziomatv(m): 1:14pm On May 03, 2008 |
But why can't Nigerian Govt. look into solar energy as an alternative instead of repeating old style method that has never worked since Independence? |
Re: Yar’adua Approves Higher Electricity Tariff by yewaman1(m): 1:28pm On May 03, 2008 |
even with the current situation of the things, we are not getting enough power supply, who says the service of almighy PHCN will improve! |
Re: Yar’adua Approves Higher Electricity Tariff by Tonim(f): 1:35pm On May 03, 2008 |
oziomatv: good point oziomatv, but you know we have abundant gas reserves (actually more than oil). I don't know about the cost effectiveness of using gas for power vs. solar energy |
Re: Yar’adua Approves Higher Electricity Tariff by oYaTo(m): 1:51pm On May 03, 2008 |
The scheme actually makes a lot of sense, investors can will not enter the industry cos of the current price rates which are flat, and simultaneously the govt cannot increase the prices cos right now electric power is a joke in this country. The strategy? The govt is trying to satisfy the investors and the nigerian consumers at the same time, so it will pick up the cost of increase for the next three years until atleast the situation improves. I sincerely hope it works out sha. |
Re: Yar’adua Approves Higher Electricity Tariff by oziomatv(m): 2:20pm On May 03, 2008 |
Tonim: How long will gas and oil last before the whiteman wave it out like coal? We Nigerians should be a little bit advance in thinking and making future plans. We can't be running behind others, We should be running along side or even ahead to meet up. Govt. should invest on solar energy rather than all these failed method they're using. |
Re: Yar’adua Approves Higher Electricity Tariff by macherie1: 5:23pm On May 03, 2008 |
this is like pouring new wine in an old bottle.it tastes the same.corruption has eaten so deep into the power system and no subsidy or increment in tarrif is going to do the cure.the solution lies in fighting corruption. |
Re: Yar’adua Approves Higher Electricity Tariff by dee02(m): 6:08pm On May 03, 2008 |
I would have prefered he approves a bigger tariff for his failing health! Why approve a tariff for a non-existent amenity in the first place?! |
Re: Yar’adua Approves Higher Electricity Tariff by ufofex(m): 6:51pm On May 03, 2008 |
cola: Before the GSM revolution, we had NITEL. Govt. did not have to pay subsidies for us to recharge our GSM phones, govt. did not take part in the pricing, not even with the PTOs. Market forces/competition played their role, and those who could afford it got it. We didn't need govt. subsidies and we sure don't need it now. Even if electrcity is charged at #10 per unit, it will still be far less a price to pay when you compare it to howmuch we use to run our generators. Subsidies or no subsidies, govt. should create an enabling environment that will allow for true private sector/investors participation in the power sector, and leave the pricing for market forces to determine. |
Re: Yar’adua Approves Higher Electricity Tariff by Tonim(f): 8:08pm On May 03, 2008 |
oziomatv: oziomatv, I did some research on solar energy, guess what, california has mandated that all power companies operating in the state must derive 20% of their power source from renewable energy by the year 2010. To meet this mandate, Solel Inc is building a 553 MW solar thermal plant (the world's largest solar plant) in the californian desert. It has already signed a 25 year power purchasing agreement with a california power utility company. Solel Inc has promised to sell power at rates competitive with plants powered by fossil fuel (such as gas). We should start exploring solar energy now, we can have both solar based and fossil based power plants in Nigeria. actually, those solar based plants would be better suited for the north |
Re: Yar’adua Approves Higher Electricity Tariff by cola: 8:39pm On May 03, 2008 |
ufofex: you obviously can't see your own contradiction. enabling environment? the first and foremost enabling environment to any investor is an environment that makes it most likely for him to recoup his investment. And that has been PROVEN not to be the case with current tariffs. Corruption is the biggest obstacle here. Just like it will be obstacle for ANY other suggested solution. Who says the GSM rate wasn't moderated by govt? NCC did and is still trying to do same since. For a critical industry like energy, you certainly don't want some SYNDICATES to take charge of affairs. Regulation of some degree by govt is needed at least for the early years. Bottomline? IF YOU'RE FOR PRIVATIZATION, YOU HAVE TO BE FOR RAISE OF TARIFF. Govt has only proposed to pick the bill of the extra cost to cushion the effect on the poor consumers (masses) who are not even getting the power in the first place. someone posted something about the cost of fuelling his generator being more than any tariff that might be proposed, insinuating he doesn't need the subsidy. Well congratulations you can afford it! What about those 60% living on less than $1 a day? |
Re: Yar’adua Approves Higher Electricity Tariff by cola: 8:52pm On May 03, 2008 |
See what we're talking about!!! Just as I'm typing this, I'm watching this special documentary on CNN on the troubled mortgage industry in the USA - 'MORTGAGE MELTDOWN'. One of the points I just heard them made is ", if only there had been some level of regulation, "we wouldn't have been in this mess, THAT's COMING FROM THE CAPITAL OF CAPITALISM. Market forces determinant is good and welcome, but in some industries, some degree of regulation is necessary. |
Re: Yar’adua Approves Higher Electricity Tariff by SkyBlue1: 8:55pm On May 03, 2008 |
@cola i understand where you are coming from but considering that the bills are inflated anyway by corrupt officials won't the tackling of corruption in the sector have thesame effect as increasing the tarrifs since money that is meant for bills doesn't all go to NEPA anyway? So in a way aren't people already paying a higher tarrif due to this and won't fighting corruption in the sector be beneficial and just better in the long run in stead of short term artificial solutions? NEPA has complete and utter monopoly in the power sector and this has been a major cause of where things are now. They don't need to strive to be better or improve i mean why should they? What competition do they have to battle against? They even get government backing so what is the motivation for them to improve There will be no light for like a whole month forcing people to run generators constantly, wasting fuel and polluting the environment and yet NEPA would still come and collect bills and you really do believe increasing tarriff is the answer? I don't believe anyone was against regulation of the industry, but should government role be any bigger than regulating? Besides when you don't have competition and only one power agency then what on earth are you regulating?? |
Re: Yar’adua Approves Higher Electricity Tariff by cola: 9:47pm On May 03, 2008 |
@skyblue you don 't seem to get it. You dead right about corruption.eThe increament however isn't meant to make more money for PHCN, it is rather an effort to make the environment attractive to private investors who would eventually give PHCN that competition you are talking about. Bills are inflated, right, and maybe half of the revenue is even siphoned, but the analysis on ground is that mathematically, N4/kwh even if all of it is remitted just isn't right for any serious private investor! Essentilally it means it actually has been double tragedy for PHCN!! The N4-6/kwh being charged is ab initio inadequate to cover cost, then to make matters worse, half of the inadequate revenue is even being stolen by corrupt officials. So the all encompassing solutions are: FIGHT CORRUPTION (to shore up PHCH's revenue) and RAISE TARIFF (to make it economically feasible for private investors to come in). Summary: The lasting solution is PRIVATE INVESTMENT IN ENERGY and it has been made clear that can't and won't happen with N4/kwh. |
Re: Yar’adua Approves Higher Electricity Tariff by Nobody: 10:32pm On May 03, 2008 |
@cola, whateva text book xplanation you give wouldnt be sold easily.lets know what we are paying for, and let power be stable at least to an extent. |
Re: Yar’adua Approves Higher Electricity Tariff by mystikal(m): 10:49pm On May 03, 2008 |
Coruption would always be a problem no matter what solution u guys are proffering, so lets just stick with the scheme and be optimistic about its working |
Re: Yar’adua Approves Higher Electricity Tariff by Uche2nna(m): 10:50pm On May 03, 2008 |
olrotimi: I am not an economist but is it not easy to agree that the only way out of this power problem is privatisation. Federal government owned institutions in Nigeria is a joke. Nitel et al have shown us that. We would still be reeling under telecommunication problems if the sector was not thrown open. Competition always breeds efficiency or else U are squeezed out of the equation. Increasing the cost of power consumption in Nigeria might be a problem for Nigerians but that problem would be readily diluted out if power is delivered at least 18 to 20 hours a day. Do U know how much is lost everyday due to lack of power supply? |
Re: Yar’adua Approves Higher Electricity Tariff by Nobody: 10:59pm On May 03, 2008 |
and thank god we are not to bear the imediate burden of the hike cos some national billions are going into subsidies as in the case of oil.but one thing is for sure, overtime, the burden would be gradually placed on our fragile heads. |
Re: Yar’adua Approves Higher Electricity Tariff by Radiant(f): 12:55am On May 04, 2008 |
How will you increase tariffs when many parts of Nigeria don't have power cables let alone power supply? Apart from that some parts of Nigeria have blown transformers for the past one year or more and of course irregular power supply to the rest of the country. Now tell me, how do you expect to generate revenue (I call it revenue 'cause it's like asking an unemployed to pay tax)from citizens who provide their own power supply by using generators and lanterns? How can you leave the basics and jump to such huge project? It's just like wanting to wear a crown you didn't compete for. Common fuel scarcity he hasn't addressed and you tell me of electricity. Your Excellency, one step at a time please. Forget subsidy and use that money to fix up all the blown transformers and install power cables. |
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