Nigeria power rates to rise up to 88%
By Xan Rice in Abuja

Electricity tariffs in Nigeria will increase up to 88 per cent under reforms designed to revive the power sector and attract outside investors.
The proposed new rates, seen by the Financial Times, will be announced in the coming weeks, before the privatisation of 18 state-run power generation, distribution and transmission companies this year.

But the move is likely to cause controversy, coming just a month after the removal of fuel subsidies, which caused petrol prices to more than double. The price increase prompted street protests and a weeklong nationwide strike, forcing Goodluck Jonathan’s administration partly to backtrack.
Nigeria’s government said the higher “cost-reflective tariffs” for residential and commercial electricity customers were necessary to ensure that investors could make a profit.
Under the new pricing regime, due to become effective in April, tariffs will rise 25-88 per cent, though most customer classes will see a 50 per cent increase in their bills. The government hopes that cushioning the blow for the poorest consumers – a policy absent during the fuel subsidy removal – will ensure that there is no repeat of the public outcry.
“We are making sure that the urban poor and rural dwellers be provided a subsidy so that they don’t see a significant increase in tariff,” Bart Nnaji, the minister of power, said in an interview in Abuja. “The rest should be able to pay for it.”

Nigeria sells power below cost at an average of about 10 naira, or six US cents, per kilowatt hour, one of the cheapest rates in Africa. But despite having large reserves of natural gas that can fire thermal plants, the country’s electricity supply and service is among the world’s worst, with half of the 160m population lacking access to the grid. Peak output is little over 4,000MW, with per capita consumption just 3 per cent that of South Africa, Nigeria’s rival for the continent’s biggest economy.
Frequent blackouts mean that most of Nigeria’s power comes from privately owned petrol and diesel generators, greatly increasing business costs and deterring potential investors. It is hoped that privatisation will greatly improve service and output, with the government targeting 18,000MW output by 2016.
The new tariff was calculated to reflect the real cost of supplying electricity, with a return of investment factored in, according to the Nigerian Electricity Regulatory Commission. This comes to about 23 naira/kWh, which Mr Nnaji said was near the average price in Africa and less than half the cost of self-generated power in Nigeria.
The biggest consumers of electricity, wealthy individuals and businesses, will pay the highest rates, cross-subsidising the less well-off. The government will also provide a 60bn naira subsidy this year, allowing the tariff for the poorest customers to be fixed at 3.3 naira.
Previous attempts to reform the power sector have foundered, despite the injection of billions of dollars. But these efforts appear to have momentum. Bolanle Onagoruwa, director-general of the Bureau of Public Enterprises, charged with selling the six state-owned power generation and 11 distribution companies carved out of the Power Holding Company of Nigeria, told the Financial Times that privatisation should be finished by the end of the year.
Hundreds of companies have expressed interest in investing, according to the bureau of public enterprises. Nigeria’s transmission company will also be privately managed, with Canada’s Manitoba Hydro and Power Grid Corporation of India shortlisted to submit bids.
The World Bank, which is providing partial risk guarantees to investors, said Nigeria’s power sector reform was one of the most complex undertaken in Africa.

http://www.ft.com/cms/s/0/78b805ec-5586-11e1-9d95-00144feabdc0.html?ftcamp=published_links/rss/world/feed//product#axzz1mByLajdI




Subsidy again!!!! More strikes ahead abi??

Oh Lord have mercy on us. This is the same Government that could not get itself to look into the problems that plagued our fuel subsidy, and probably still shaking on tackling it, now boldly announcing yet another subsidy is on the way. ROFLMAO!!

but will we Nigerians allow this work?

Nigeria as you can see from that article is filled with too many contradictions. I cant wait for this GEJ guy to breeze by, I'm tired of You Man.

Chai, am really getting tired of dis fresh air

If there is 24hrs power supply every day and they are tripling the rates after we've seen continous uninterrupted power, they will have my support. This will reduce greatly how much I buy for fuel at home and office and even save me money. Also, our total petroleum requirement

Another Ojota in the making, it seems to me that this people that are "ruling" Nigeria are just dumbed and bereft of ideas, must the solution to electricity problem in Nigeria necessarily be increase in tarrifs? , stupid wicked people.

i pray for patrotic army to take over this country and deal with blood sucking PDP from us, because from all indication GEJ is taking Nigerian Patience for Granted, we all no who steal our power money during Baba Aremu regime so bring them to Book, this government is playing with a tail of a tiger and at last Mr president you can't insult a crocodile while crossing a river.

To be honest, if power is readily available i will pay as long as i pay for what i consume.

In the history of Nigeria we only had almost 24 hours electricity when only 5% of the nation had electricity (old colonial times). Now the government wants to privatise the electricity sector so we will all get a better service but at a higher price, and we are complaining.

This how people complained bitterly when GSM licences were sold and NITEL couldn"t compete.

A few years ago NITEL staff were Gods, they could 'toss' your line at anytime, their offices were like markets, bribes being paid to get a line or a line reconnected. That's just PHNC today. I am scared anytime I see NEPA vehicle with their ladder pass my office, even though I pay my bill on time, they always have some excuse to cut the small light they give us.

Gej is too dumb and weak to lead this country.

Govt should be able to cater for the interest of the public and welfare of the people but here in Naijiriya all we hear is increment why?

No wonder they installed my pay-as-you go meter just last week,paid for it since last year.Well,hopefully this works ** If i don't consume electricity the freaking units will stay static anyways **

Nigerians get ready.
This is time to OCCUPY every available transformer and PHCN offices nationwide.
This government has made fool of us too many times.
Sovereignty belong to the people.
But we have already lost our sovereignty as Nigerian to the Cabals and rulers that continues to impoverish and suppress us.
Arise O compatriots.
Let us salvage Nigeria.

@Garth

Whilst I agree with that billions have been wasted, corruption cannot be taken out overnight because it's engrained in the system from the MD to the gateman. What you do is remove the 'food' for them to steal and eat. As mentioned in my previous posts, during Shagari and even military governments one of the highest profile cabinent position was 'minister of communications' - with the derugulated, privatised telecoms I bet you don't know the name of current Minister of Communications.

Privatise the sector, install pay-as-you-go meters, no light, no income. Right now in Lagos you wait up to a year for a 'pay-as- you- go meter. Imagine waiting one year to get a sim card?

Don't just fold your arms and watch this wicked people ruin this nation. No to chop chop goverment

Shebi na if d light dey,

One constant thing about this government is it lack of proper planning and priority misplacement. How would they describe the[b] 'urban poor and rural dwellers'[/b] that would be provided a subsidy when virtually 80% percent of the country falls in the category mentioned for subsidy. So sooner or later they would be preaching about cabals sabotaging the process and subsidy raising from 60bn to 600bn, GIVE US UNINTERRUPTED POWER SUPPLY AND WE WILL BE HAPPY TO PAY. At least would still be cheaper than fueling a generator for 10 hours a day,

what dividends have you seen yet from the fuel subsidy removal? pls dont tell me it's too early. structures and plans can be put on ground. NOTHING will come out of it and they'll blame it on insufficient revenue. 100% subsidy removal will be clamoured for if nigerians want better result. they are just greedy visionless leaders.

if you deregulate power/PMS, why not leave the price to market forces? what if any foreign investor chooses to bring in these commodities at far more affordable prices. this ojoro government is really nauseating!

Who talk sey na northerners as a ruler dragging us back in this country make dem come see weytin southerner' president don cause for us.

@Pato405

What are you saying? The goverment should give us free electricity - ie 100% subsidy? Or they should privatise electricity sector and the foreigners will give us electricity  at below cost? I don't understand you, please clarify

Talk about putting the cart before the horse. Why can't they put in effort to improve power before increasing tarrifs.

WE NO GO GREE OO,we no go gree,Power holding we no go gree

If there is constant electricity at least for 6months,i will be glad to pay the 50% increments compare to my diesel and petrol gens.

@ Faithin9ja.

firstly, when you remove subsidy on anything, the prices increase and it liberalises the market. during the last PMS controversy, the government initially aimed at removing subsidy completely [i.e 141-65=76=100%. 76naira is the subsidy per. litter]. where 141 is final price, 65 was initial price and 76 is subsidy govt claims to be paying per litter. after so much wrangling and debate, it was reduced to 97naira.this practically means that the govt still pays a subsidy of 44naira per litter of PMS. i.e government has decided to pay 44naira [57% subsidy] and allow masses to pay additional 32naira [43% subsidy]
.
note; PMS used to be =141 = 65+ 76. masses paid 65 & govt paid 76. if you remove the subsidy completely [100%] masses will pay 141

but because masses cant pay 141, we now have PMS=141= 97 (65+32) + 44. masses pay 97 and govt pay 44. this means that subsidy has been reduced by 43%. 76 (100%) - 32 (43%) = 44 (57%)

apparently, the effective subsidy we have in place now is 57%.


this same shenanigan government want to remove subsidy on electricity and allow prices do a somersault by 88% which is only 12% away from 100% [almost double]. and I'm sure that at that rate, many foreign investors will find it enticing to come in. now,my question is- what is the current subsidy rate on power? and is why fix the rate yourself when you have liberalised the market?

as far as i'm concerned, 12% away from twice the initial cost is not enough to choose to gamble with Nigerian government. they are not worth it. you'll pay and still not get the power supplied sometimes. so, why not patronise foreign investors. for all I care, if they insist on removing subsidy on power, they shoiuld as well remove it completely [100%]. let foreign investors come in. they'll do the job better and at a more affordable and valuable rate than this ojoro government.

@Patos405

Sorry I think you are mixing everything up. The proposal is increase price of electricity so private investors will be encouraged to invest, what we currently pay NEPA is not enough to cover their costs, hence all the current IPP's are not having it easy.

The subsidy is to put in place when the tariff rises, which it has not yet risen.

First let's see if private sector is allowed invest and the sector allowed to flourish, judging by the responses on this thread it's like most Nigerians don't want to the plan a chance because the past failed promises and obvious corruption of the years.

The Nigerian masses still don't understand the evils of privatization or why it is being forced on them, those World Economic powers forcing their policies down our throat never had the interest of the people at heart, sometimes i wonder if the people can't read between the lines and the game they are being played but maybe we should have a try here.
1: The Foreign coporations and their Governments orders the president to privatise or he will meet his demise.
2: He has to increase the tariffs so that he will bear the blunt of the people and those foreign greedy corporations won't have to do it themselves.
3: The Foreign Corporations come in and buys the national assets for pennies and then suck the masses dry with the new tariff.
4: Production remains same and local industries that can't afford fuel can no longer afford electricity killing the few industries we had and grinding local production to a halt, the result of that is pushing Nigeria more towards import bases economy favouring those foreign countries that conspired it in the first place and creating a new wave of poor masses or totally destroying or shrinking the middle class.

Why can't we see through these spoof and understand that some nations are out to destroy our country in ally with greedy heartless politicians, why can't we unite and see our self through ? How can people defend this sort of daylight robbery ?
It saddens me all the time the ignorance of Nigerians.
How can they increase tariff and then pay those foreign companies subsidies again, its like eating your cake and having it back.

faithin9ja:

. The proposal is increase price of electricity so private investors will be encouraged to invest.

this does not sound rational. do you increase the price because you want to encourage fooreign investors or you increase it to provide better services?

faithin9ja:



The subsidy is to put in place when the tariff rises, which it has not yet risen.

more confusion. you just stated that the govt want to increase the rates/prices. you (the government) cant increase the prices yourself and still put subsidy in place. it's either the masses bear the financial brunt or you (the government) bears it on their behalf. in that case, you'll call bearing their financial burden , a 'subsidy'.

faithin9ja:

what we currently pay NEPA is not enough to cover their costs, hence all the current IPP's are not having it easy.

if what we pay NEPA is not enough, it means the government has been subsidising it. you can't give what you don't have. NEPA is the last organisation to provide you services below running cost. their problem is just gross incompetence and laziness, simple.

besides, Nigeria crying about foreign investors coming in to provide them electricity is just ludicrous. Nigeria is a country in comatose. they sufer amidst plenty. they choose to wash the soap off their eyes with saliva while a pool of water lies in their front. we can generate electricity locally from dams and wind using turbines. we have dams, lakes, rivers, even d ocean/sea very close. yet we can't harness this sources for power. the UK and other countries (China, US, Germany, Spain, Italy, France, Canada, Denmark. see  http://en.wikipedia.org/wiki/Wind_power ) currently generates more than it can consume from wind turbines. (9ja just choose to romance with mediocrity, ignorance, suffering and poverty in the midst of plenty. the same way they have abundance of crude oil but choose to sell pump price same as countries that have nothing related to crude oil.

these just shows the kind of leaders we have. let them sit back on their fat ases and wait for importation, foreign investors e.t.c as if those foreigners are magicians.

@thot
you are so right, the biggest mistake was private sector involvement in Telecoms, banking, hotels, airlines. We should go back to NITEL, Nigerian Airways, New Nigeria Bank, etc.

faithin9ja:

@thot
you are so right, the biggest mistake was private sector involvement in Telecoms, banking, hotels, airlines. We should go back to NITEL, Nigerian Airways, New Nigeria Bank, etc.

indeed, , una never suffer reach.

going back is not the problem. it would have been better if people can sit down, think radically, bring in creativity, dedication, devotion and forget corruption. that's the only way out. don't think foreigners will come an make your country better for you. they are also seeking to be rich. their vested interest is to the benefit of their own pockets.

we have just bluntly refused to move forward as a nation.

laziness and corruption has been enthroned. make una enjoy am like that.

Ok, currently I pay N1,210 every month as electricity bills.
If I now pay N2,100 or so and get power supply
I'll be better-off than fueling my generator all the time.

Bottomline. . . not the tariffs but stable power supply that matters.