From JIDAUNA YANUNG, Abuja.
CHAIRMAN of the Nigeria Electricity Regulatory Commission (NERC), Sanusi Garba, has disclosed that government would pay N3.2 trillion as subsidy on electricity this year if the recent increase in the tariff is to be reversed.
Disclosing this at a stakeholders meeting called by the House of Representatives Committee on Power, Garba said that current investment in the sector was not enough to guarantee steady power supply and pointed out that if nothing concrete was done to address issues in the sector, it would be heading for doom.
He added that prior to the recent review in tariff, electricity distribution companies were only obligated to pay 10 percent of their energy invoice, emphasizing that the lack of cash backing for subsidy was creating a liquidity challenge in the sector.
The NERC boss blamed the nonpayment of subsidy on the continued dip in gas supply and power generation, adding that the continuous decline of generation and system collapse were largely linked to liquidity challenge.
He further explained that between January 2020 and January 2023, tariff increased from 55 percent of cost to 94 percent cost recovery.
