₦airaland Forum

nairalanda1:
Cost reflective tarrifs, cost reflective tarrifs, cost reflective tarrifs...


(Sits back to hear the usual arguments)

1.You are excusing government
No, I'm stating that if a government allows companies to charge cost reflective tarrifs, it would enable the companies to attract investment, and grow their income to a point where they would be able to pay for improvements. Like doing that in the power sector means more electricity, etc.
Seriously, we have had every government subsidse power since 1978. If it was working, then we would be generating 200000 mw by now. Time to let the free market do its thing...

2.But this country does that
Yes, and you know that they probably have incurred a lot of debt doing so...which is why countries like Egypt are abandoning subsides, and Bangladesh is planning to do so, to use two examples.

3. But they are overcharging us!
Yes, with the level of power theft (now reducing thankfully), overcharging happens to cover for losses from that, as well as government not paying subsides at all, and people underpaying even at subsidised rates
And it is not right, but think about it. The band system means that power companies make a profit from one fifth of their consumers...and lose money on the rest. Thus the result...overcharging or business goes under.
As the black markets of many communist countries teach us, when you prevent someone from making money legally, the only way is illegal.

4.But the sector made a profit of N1 trillion last year.
Yes and they owe the gas companies six trillion in debt, which is projected to rise to eight trillion. Plus improvements to the power sector would cost about N15 trillion naira yearly for at least 5 years. That's the equivalent of government doing a new Lagos.Calabar road every year

Can one trillion naira pay debt of six trillion. If you think it can, I have a bridge to sell you in Tashkent.

5. But deregulation does not work
Ivory coast and Ghana deregulated their power sector. And it has worked (The former had national grid collapse last in 1984!). And yes, they aren't as rich as we are (Ghanaians for example disconnect from the mains supply, usually at night, to save power).

6. But BAND A
Band A can't, even on a good day, subsidize power for the other bands. If it was, government won't be owing subsides. At best Band A provides one fifth of a trillion naira of profits made, and that's not even up to paying for the trillions owed in subsidy payments. (said to be around 4 trillion naira.)
And yes, I know, corruption...but for a sector to work, it has to be let to make a profit. You don't buy antenna and wires for your GSM provider because they are allowed to charge a cost reflective tarrif.

7: You are working for the DISCOS and GENCOS

Nope, never did work for them or do anything for them. Don;t work for APC or PDP...especially since I have held this view since 2013...confirmed as more information came in.



(I still expect to be called a government slave, so, lol)

The NERC currently charges cost reflective tariffs. Obviously, it's not working. It's not always 1+2 = 3. If the power sector is entirely deregulated and anyone can buy a license to generate power, with some government tax incentives, and a body like the NERC just offering regulatory oversight, that might be different. But in Nigeria, you'll always probably still end up with a monopoly, as we can see with oil, which is now back to status quo and might keep going higher. This country loves monopolies because they make corruption easier and in fact legal. But when we're ready as a country, we'// probably do what needs to be done.

This is why appointments should never be based on Politics alone...!

JimD:
The NERC currently charges cost reflective tariffs. Obviously, it's not working. It's not always 1+2 = 3. If the power sector is entirely deregulated and anyone can buy a license to generate power, with some government tax incentives, and a body like the NERC just offering regulatory oversight, that might be different. But in Nigeria, you'll always probably still end up with a monopoly, as we can see with oil, which is now back to status quo and might keep going higher. This country loves monopolies because they make corruption easier and in fact legal. But when we're ready as a country, we'// probably do what needs to be done.

Cost reflective tarrifs are only charged for band A people, who form 20% of total consumers. Everyone else pays below cost reflective tarrifs.

Instead to subject yourself to a public ridicule due to your incompetence. Why not resign and prioritize your peace of mind.

Goes to show tinubu only appoints not based on capabilities

nairalanda1:
Cost reflective tarrifs are only charged for band A people, who form 20% of total consumers. Everyone else pays below cost reflective tarrifs.

Nigeria is implementing this at around 70% - 80% with subsidies covering the rest. Cost reflective meaning "you get what you pay for" and the cost of power generation and distribution falls on the customer, which is the reason for Band A to Band E. Everyone else pays less because they get less than Band A. You wouldn't expect people in villages who experience light maybe once a week to pay Band A prices. The problem lies in the extremely low generation capacity relative to population. That can't be fixed overnight. But you can incentivize alternatives.

It is not the minister's fault.

The biggest challenge the sector faces is subsidized power. The subsidy leads to huge debts to the Genco's who now owe their supplies of natural gas.

The subsidy also leads to underinvestment in the electricity sector, which is manifested through blackouts.

The long underinvestment in the power sector can also not be resolved overnight.

In Tinubu's second term if he wins, he would end all subsidized electricity and transfer all consumers on Band A eventually.

He cant do that now or he might lose his re-election bid.

JimD:
Cost reflective meaning "you get what you pay for." Everyone else pays less because they get less than Band A. You wouldn't expect people in villages who experience light maybe once a week to pay Band A prices. The problem lies in the extremely low generation capacity relative to population. That can't be fixed overnight. But you can incentivize alternatives.

No, cost reflective tarrifs, means tarrifs that enable the power sector make enough of a profit, or tarrifs that are higher in money cost than the cost of production

In other words, everyone, regardless of hours of supply/band, pays a price of above N250 or above per unit of power consumed. So that the sector makes a profit.

Most pay below the cost of production, which is why the sector loses money and is in a constant liquidity crisis...hence the lack of power.

And generation can only be fixed by investment, which won't happen without a cost reflective tarrif in place.

Sorry, but your definition is wrong. Infact, it is this idea of pay as you use that contributes to the liquidity problems we have in the power sector.

This is the worst ever Minister of power.

I remember when Gbadofuus were insulting Prof. Barth Nnaji, claiming they can do it better..

E don set..

I don't just know why I dislike this Adelabu with passion. He is one of the most useless minister in Tinubu cabinet.

This useless minister came with Band A, Band B, Band C electricity supply it has be a big scam on Nigerians.

grandstar:
It is not the minister's fault.

The biggest challenge the sector faces is subsidized power. The subsidy leads to huge debts to the Genco's who now owe their supplies of natural gas.

The subsidy also leads to underinvestment in the electricity sector, which is manifested through blackouts.

The long underinvestment in the power sector can also not be resolved overnight.

In Tinubu's second term if he wins, he would end all subsidized electricity and transfer all consumers on Band A eventually.

He cant do that now or he might lose his re-election bid.

Well, the tinubu should start doing it now, or we won't have light at all. Enough is enough.

Band A is the greatest fraud in the power sector that Nigerians accepted like bandits. Maybe they misread the bands for bandits

nairalanda1:
No, cost reflective tarrifs, means tarrifs that enable the power sector make enough of a profit, or tarrifs that are higher in money cost than the cost of production

In other words, everyone, regardless of hours of supply/band, pays a price of above N250 or above per unit of power consumed. So that the sector makes a profit.

Most pay below the cost of production, which is why the sector loses money and is in a constant liquidity crisis...hence the lack of power.

And generation can only be fixed by investment, which won't happen without a cost reflective tarrif in place.

Sorry, but your definition is wrong. Infact, it is this idea of pay as you use that contributes to the liquidity problems we have in the power sector.

Read the edited post. This is like saying the solution to the electricity problem is "tax the poor the same as the rich while the rich enjoys all the benefits". Even taxes don't work that way. You probably should read more about cost-reflective tariffs.

Minister of hell fire and heat

Didijiji:
https://osundefender.com/electricity-woes-nigerians-drag-adelabu-on-social-media-as-crisis-bites-harder/


See the people that want to change Nigeria abi renew our hope!

They are the worst set of leaders or ministers this country has ever had. Gross darkness over the land with the terrible heat and the government is careless about the horrific power situation

The worst data in national grid falls

Tueeehh

When Moses led the Israelites out of Egypt, the journey was grueling - filled with DARKNESS, fear, and suffering. Many cursed God, begged to return to Egypt, and lacked the vision to see what lay ahead.

Opposition (the obidients) to Moses was rampant: some were jealous, some harbored personal hatred, and some couldn't even explain their own resistance. Yet none of it mattered. God's plan was not subject to a vote - the Israelites reached the Promised Land regardless.


@CityBoyMovement
#CityBoyMovement

Tinubu till 2031.

“His Royal Highness, The Olokunkun of Okunkunland… Wiwo ni National Grid ma n wo… Eyan Powerbank… Alase Ekeji Solar Panel, Ore timo timo Generator.…

Mo shí fìlá f’órí adé olókùnkùnland 👑

Oba ké’epé oooo

Oba afòkùnkùn sorò 1

Nigeria power situation is irredeemable. I don't know who cursed this country to this extent. That person really needs to reverse that curse.

Usmanovic95:
The fact that also rock got disconnected from national grid already cemented adelabu's status as the worst minister of power ever.

Aso villa was getting a electric bill of 47 billion a year.
The solar system cost 19billion.
Do the maths, do you really not think it is cheaper?
This has absolutely nothing to do with the grid.
Nigerians don't think

You are guilty of the same ethnocentric mindsets because Wike and Umahi are not of the President's ethnic. That doesn't stop him from searching for a better person though, the earlier some of you stop assessing issues from tribal perspectives, the better for the country. Try to know why Nnaji resigned as a Minister of Power and tell us if the conflict of interest has been removed for him to be appointed a Minister again.

bjcole:
I m surprised that people are blaming the minister and not the president, there is little or nothing the minister could do, if the govt refuses to invest in the power sector.

This President has chosen not to take power serious, rather he was only interested in increasing tarrifs and creating discrepancies and segregation among Nigerians, or how do you explain the various band policies they introduced, to make matter worse, he now appointed a novice to head the power ministry, where are the likes of Barth Nnaji? Tinubu will never see such, because of bigotry and ethnocentric mindsets.

The failure of the power sector and the darkness we are experiencing presently across the whole country is an indictment on this administration.

The guy really fumbled! I think the ministry is too big for a novice like him. A ministry that even Fashola the great could not do anything! Funny enough he wants to be the governor of his. state.

We all know most of them are clueless and figure head nothing to show for it
What a shame

what's the way forward then.

nairalanda1:
And the foreign investors you want won't come because government won't let them charge cost reflective tarrifs.

/
Adelabu should ignore their infantile rants. What do they need electricity for? To watch BBN and EPL?

Patapata on Election Day, give them N2k and a can of Beta Malt—their complaints will turn to accolades . Four years of pain will be forgotten with a sip of malt. No be Nigerians? Politicians know them too well to be bothered.

/

DeclanR:
Oga, u dey read so?
Nawaooo

What nonsense is there to read?
A Minister who have failed critically in the power sector, does he even deserve to be made a Class Prefect?
Not to talk of giving him a Traditional title.
What did he do to deserve such honour?
Even his own Boss the President is no more on his useless national grid.
The entire country is in darkness.

My own is who are those trying to back him to become the next governor of Oyo state?
I know data boys will always support mediocre candidates but why should a man that has failed to provide let alone stabilize electricity be backed to become the governor of Oyo state?

Minister of tariff hike.

That's all he knows and is good at.

Kobicove:
If Oyo people make mistake of making him governor their own is finished

He should not be rewarded with gubernatorial ticket. He's a failure