Electricity Featured

GenCos to get cheaper gas

  • Electricity tariffs will go down, says minister

 Nigerians will witness a reduction in the cost of electricity tariff, Minister of Labour and Employment Chris Ngige said on Sunday night.

The minister said the Federal Government and organised labour agreed on the reduction in the cost of gas sold to Generating Companies to $1.50 cents as against the $2.50 cents it is sold to GENCOs.

Ngige said some paperwork needs to be done before Nigerians can begin to benefit from the reduction in tariff.

Ngige said this after a bipartite meeting between the government and organised labour to consider the reports on electricity tariff and petrol increases at the Banquet Hall of the Presidential Villa, Abuja.

The Technical Committee is made up of Minister of State for Labour and Employment Festus Keyamo, (Chairman); Minister of State Power, Godwin Jedy-Agba – member; Chairman, National Electricity Regulatory Commission, Prof. James Momoh – member and the Special Assistant to President Muhammadu Buhari on Infrastructure, Ahmad Rufai Zakari as Secretary.

 Others are Dr. Onoho’Omhen Ebhohimhen – member (NLC); Deputy President of the NLC and Secretary-General, Nigeria Union of Electricity Employees (NUEE), Comrade Joe Ajaero – member; Comrade Chris Okonkwo – member (TUC) and a representative of Power Distribution Companies (DisCos) – member.

“There is also a resolution as regards gas companies reducing gas pricing for gas sold to power companies, GENCOS and the rest of them so that the price of electricity per unit will go down and the consumers will benefit from it. We have given the marching orders for them to do so.

“Some paperwork has to be done and once that is done, the price of electricity will go down and once it goes down, the consumers will benefit,” the minister said.

 A member of the Seven – man technical committee on electricity tariff told The Nation that constant hike in tariff was as a result of the high cost of gas – the critical component used by GenCos to power their plants, which was being sold at dollar rate.

The GenCos sell power to the Distribution Companies (DisCos) which take it to the end-users. He said the committee recommended that gas should not be sold to GENCOs at dollar rate.

Other recommendations of the committee include: a review of power privatisation; Labour should be included in the NERC; illegal migration to different bands should stop and implementation of January tariff increase should stop.

A labour leader said the committee rejected the forceful migration of electricity users to different bands.

He said: “The government accepted our recommendation that gas be sold to GENCOs at $1.50 cent. It is now left for them to sort it out with the gas companies.

“We rejected the January increment of tariff. The issue of review of privatisation will start up immediately and make sure it is completed before the end of this year.

“The Committee also recommended that Labour should be included in the NERC.

 “We also recommended that illegal migration should stop. You know some people could be in band D and then you say power has improved and then you migrate them and of course the higher they migrate them it will increase the tariff.”

Also on Monday, Ngige said President Buhari and state governors will discuss the issue of fuel pricing Thursday.

He said Organised Labour had investigated the report of the Technical Committee on Premium Motor Spirit Pricing (otherwise known as petrol) Framework as agreed at the last meeting and made their submissions alongside the Nigerian National Petroleum Corporation.

Ngige insisted that the government had no money for fuel subsidy following the deregulation of the sector.

The minister said: “The labour side saw that they were making some points and as I said, it is work in progress. Governors are going to discuss this on Thursday.

“They have discussed this at the National Economic Council and so, everybody is involved because we find ourselves in dire straits. There is no money for subsidy.”

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