The Nigerian Electricity Regulatory Commission (NERC) has said that the less privileged customers in the country will be exempted from the planned tariff increase by 2021.
Recall that NERC had said that consumers would start to pay more for electricity from April 1, 2020.
But in a Consultation Paper on the Proposed Tariff Review published on its website on Thursday, the commission said Power Sector Recovery Programme (PSRP) has “proposed the elimination of tariff support in the electricity market by end of 2021 except for the less privileged customers.”
According to the regulator, the less privileged would continue to be supported under the Consumer Assistance Fund or any other intervention.
NERC further reiterated that tariffs would gradually be increased to allow the utilities in line with the provisions of the Electric Power Sector Reform Act (EPSRA), recover their efficient cost of operation.
The Commission added that the move will support reasonable return on investments while freeing up the subsidy funds for government’s utilisation in other critical sectors of the economy.
Noting that the core investors in DisCos are under contractual obligations to reduce the loss levels in the industry, NERC said it is expected that tariffs would eventually come down as a result of the efficiency gains and increased energy throughput.