The minister attributed the surge in power generation to the revised tariff, claiming it has “pushed” performance within the sector.
The revised tariff structure was implemented to incentivize performance and investment in the power sector. However, it’s worth noting that the Nigerian Electricity Regulatory Commission (NERC) had announced a tariff hike effective January 1, 2024, but consumers were assured they would continue paying the old rate, with the government subsidizing the gap, amounting to N1.6 trillion in 2024.
Despite the tariff hike, power generation had previously dropped to 3,383MW. The recent surge to 6,003MW is a significant improvement, and the government attributes this success to the revised tariff structure.
The power sector has been plagued by challenges, including inadequate funding, infrastructure deficits, and inefficiencies. The tariff hike was intended to address some of these challenges by providing a cost-reflective tariff that would incentivize investment and performance.
While the tariff hike has been controversial, with many consumers expressing concerns about the impact on their wallets, the government argues that it is necessary to ensure the sustainability of the power sector.
The minister’s statement suggests that the revised tariff structure is already yielding positive results, with power generation reaching an all-time high. However, it remains to be seen whether this trend will be sustained and whether the benefits of the tariff hike will trickle down to consumers.
As the power sector continues to evolve, it is essential to monitor the impact of the tariff hike and other reforms on the sector’s performance and the welfare of consumers.