Electricity Distribution Companies (Discos) in the country have called on the federal government to intervene in the power sector in order to avert an increase of over 200% in electricity tariff.
According to the power operators, the intervention which is needed to address over 800 billion Naira revenue shortfall can come like subsidies to consumers or provision of special access to foreign exchange for the operating companies.
The average energy rate across the country is 22 Naira 8 kobo per kilowatt, but distributors say this may increase to between 70 Naira and 105 Naira per kilowatt if the revenue shortfall persists.
Azu Obiaya, Chief Executive Officer of the Association of Nigerian Electricity Distributors, reportedly said the debts owed to electricity distribution companies by private power consumers, businesses and government authorities have reached to about N568 billion.
Obiaya added that those debts are affecting the operations of the distribution companies and many are no longer able to meet targets and service consumers.
Reports say a proposal for the increment of electricity tariff has been submitted to the Nigerian Electricity Regulatory Commission (NERC).
An electricity tariff approved by the NERC took effect in February, 2016.
However, the commission also removed fixed electricity charges ordering that Discos should only bill consumers for what they consume.
NERC said, “although, the new tariff regimes comes with an increase in energy charges, all electricity consumers (residential as well as commercial) will no longer pay fixed charges, so their total bills will depend on the electricity they actually consume and may be reduced when they conserve electricity.”