The vice chairman of Nigeria Electricity Regulatory Commission, Musiliu Oseni, has said the commission hiked the tariff of electricity because generation companies could not pay for gas and maintain their machines.
Oseni stated this while featuring on a live television programme.
The commission had earlier on Wednesday approved the increase in electricity tariff for customers in the Band A classification.
With the development, customers would pay N225 kilowatt per hour from the current N66 kilowatt per hour.
Speaking on the development, Oseni said that if nothing is done to ensure tariffs are reviewed, the market can be relatively illiquid.
“If you look at section 116 sub section 2A of the electricity act, it mandates the commission to ensure that the licenses operating efficiency are allowed to recover sufficient revenue for the capital invested and for the operational cost as well as having a return on the investments they have made.
“In that case, it means that the onus is on the commission to ensure that operators actually earn sufficient revenue that we incentivize further investments in order to ensure improvement in service delivery.
“What informed the decision apart from the provision of the act, in December 2023, there was an improvement in the quality of service down to January. From then on there was dearth in electricity availability. Lack of review of tariff caused that.
“The Discos could not be mandated to forward what they had not been allowed to charge. For that, the payment to the generation companies has significantly dipped which affected their ability to maintain their machines and to pay for gas. And gas is one of the two significant raw materials for electricity generation in Nigeria.
“At a point, it is clear that if nothing is done to ensure tariff is reviewed the market can be relatively liquid,” he said.
