The minister of power, works, and housing, Babatunde Fashola on Tuesday, May 31, 2016 availed that the Federal government would not be reversing the 45% increase in the electricity tariff which has been in effect since January 2016.
Fashola who made the assertion while briefing the Senate Committees on Labour and Power during a public hearing on the new electricity tariff stated that a reversal of the increment would cost the government about N575 billion.
Speaking further, Fashola said the the tariff would not be reversed so that market would survive, adding that a number of indices, such as borrowing rate for investors, exchange rate , availability and cost of gas, among others also contributed to the hike.
His words: “One of the reasons why the tariff had to go up was that a major component, a significant number of our power plant depends on gas and out of about 26 power plants that we have only about three are hydro.
“We were heavily dependent on gas, people were exporting gas because gas was selling outside the country at four dollars and it was selling for domestic use at one dollar.”
Speaking further, Fashola said even with the hike in tariff, Nigeria was still one of the countries with the lowest tariff rates in Africa and the world.
HeE added: “Enabling laws for the process were passed by the National Assembly in 2005, the process completed by the Executive in 2013: if the process was bad, where was oversight?’’ he asked.
The committee adjourned the public hearing to Wednesday, June 1, 2016