Stable electricity unlikely without cost-reflective tariffs — FG
The Federal Government has stated that a sustainable electricity supply in Nigeria is not possible without implementing cost-reflective tariffs for consume Read More: https://punchng.com/stable-electricity-unlikely-without-cost-reflective-tariffs-fg/
The Federal Government has emphasized the need for cost-reflective tariffs in Nigeria's electricity market to ensure sustainable supply, warning against passing inefficiencies onto consumers. At the Lagos Energy Summit 2026, Special Adviser to the President on Power, Lanre Babalola, stressed that electricity generators and gas suppliers must receive fair payment for their services.
Presently, non-Band A customers enjoy government subsidies, leading to liquidity crises that have plagued the sector for years. To address this, the government is considering revenue ring-fencing and credit enhancement arrangements to support new electricity generation and mitigate liquidity challenges. Babalola stressed the importance of an efficient tariff structure, advocating for "tariffs that are reflective of efficient cost, not a bill that passes inefficiency on to customers."
He emphasized that the electricity market had prioritized power delivery while neglecting financial arrangements to ensure generators and gas suppliers receive payment. Babalola called for bilateral contracts backed by secure payment arrangements, such as escrow accounts and payment waterfalls, to guarantee funds reach the necessary parties.
The Minister of Power, Joseph Tegbe, unveiled a four-pronged roadmap to tackle Nigeria's electricity issues, focusing on grid stabilisation, sector liquidity and sustainability, asset optimisation, and grid expansion. Tegbe highlighted that many generating units had returned to service, and the Egbin-Benin transmission line had been repaired.
Lagos State, requiring approximately 12,000MW of electricity, has been grappling with a supply deficit below 1,000MW. The Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, outlined a Seven-Point Energy Agenda aimed at unlocking additional electricity supply, enhancing infrastructure, attracting investment, improving service delivery, and fostering a commercially sustainable Lagos Electricity Market.
Written by urgent.news from Punch Nigeria's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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