Paying For Darkness: Nigerians Might Have To Pay More For Electricity – Nebo

JONATHAN and electricityElectricity consumers in the country should expect a review of electricity tariff if the price of gas to power plants increases, the Federal Government has said.

The FG said the price of gas to the power plants was likely to rise in the nearest future from the current $1.5 per million British thermal unit to $2/mbtu and that this might affect the electricity tariffs.

The Minister of Power, Prof. Chinedu Nebo made this known to chief executives of power firms in Abuja on Thursday at the headquarters of the Nigerian Electricity Regulatory Commission, NERC, during a facility tour.

His comment came on the heels of complaints made by the power firms, which said they had been facing huge revenue losses since the sector was privatized.

The minister said, “There are private people who want to do gas too, and they are saying that if they can be assured of even $2 as opposed to $1.5, they will be able to develop their gas and make sure that it gets to our generation companies.

“We need to look into all these, and when that is done, I believe we will now need to review the entire tariff structure so that there will be the requisite amount of money coming in so as to compensate for that increase”.

The electricity generation companies (GenCos) had raised the alarm that the huge revenue losses, which they often incurred, might derail the privatisation of the power sector.

Speaking on behalf of other GenCos, the Managing Director/Chief Executive Officer, Egbin Power Plc, Mr. Mike Uzoigwe, decried the loss posted by his company since it was handed over to private investors on November 1, 2013.

Mr. Uzoigwe noted that although the management had sunk in about N7bn into strengthening the plant to perform optimally, it had lost revenue to the tune of about N570m till date.

According to him, if the development subsists, it may send negative signals to potential investors that may want to invest in the sector.

He particularly cited the existence of huge metering gap and the lingering inadequate supply of gas as some of the factors working against the industry’s progress.

He said. “Our experience after privatisation is undesirable. This is because as of the end of last month, our books showed that we were losing revenue to the tune of about N570m. The revenue profile in the electricity industry is very poor. And if any future investor should look in, it will give results that may not be desirable for the country.

“Whatever can be done to help grow the profile will be desirable and help move forward. Two factors are impinging on our moving forward; the fact that consumers are not metered and the second one is the issue of gas; we can never over emphasise the problem the lack of gas is causing in the industry”.

Uzoigwe added “At Egbin, we have invested N7bn from November 1, 2013 to date to bring that plant to a point where it can be reliable. One thing is to have this available capacity; another thing is the reliability of this capacity. We have brought it to the point where it is reliable to generate 1,080 megawatts.

“But in the last three months, we have been generating only about 600MW at most. And we cannot take advantage of the economy of scale in the business we are doing; therefore we are continuously losing revenue”.


  1. If the private sector is not able to solve the problems of electricity, it would leave the burden on public companies. In many African countries, we tend to believe that a company running if it belongs to the state. But shows us otherwise. Thank you for the information.